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(This is CNBC Pro’s live coverage of Thursday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.)
Online marketplace giant Amazon took focus in the overnight market calls, with analysts at Jefferies seeing a broad range of factors likely to contribute to a surge in the company’s share prices.
The news wasn’t as good for Bank of America, with UBS worried about a potential “rate trap” that could slam one of the Big Four U.S. banks.
Check out the latest calls and chatter below. All times ET.
6:06 a.m.: Jefferies raises Amazon price target, says company has ‘plenty to be excited about’
After hosting industry experts and former Amazon employees, Jefferies thinks the company has enough in its pipeline to give investors “plenty to be excited about.”
The firm reiterated a buy rating on the e-commerce stock on Thursday and raised its price target to $225 per share from $190. Jefferies’ forecast calls for more than 23% upside from Wednesday’s $182.41 close.
“The global AWS [Amazon Web Services] and advertising opportunities are driving overall revenue growth with corresponding margin accretion to the whole business,” analyst Brent Thill said.
“Investment in AWS, content, and fulfillment supports expansion into new products, services, and geographies with sizable potential,” he added.
Thill cautioned that Amazon will need to expand its artificial intelligence offerings to stay competitive in the sector as “multi cloud adoption grows.”
Shares of Amazon have climbed more than 20% in 2024.
—Brian Evans
6:06 a.m. UBS downgrades Bank of America, says upside is limited over the next 12 months
UBS thinks Bank of America is headed for a “rate trap” which will limit upside for the stock.
The firm downgraded the bank stock to neutral from buy, but raised its price target slightly to $40 per share from $39. UBS’ forecast implies nearly 7% upside ahead from Wednesday’s $37.44 close.
Analyst Erika Najarian defines the “rate trap” as a double edged sword of central bank interest rate cuts or a higher-for-longer scenario. If the Federal Reserve indeed does pivot to cuts, then “asset sensitive BAC will be subject to downward revisions to EPS [earnings per share]” and will hurt its market multiple.
If interest rates remain elevated for longer, Najarian says, then investors may become concerned with BofA’s held to maturity portfolio which could also hurt the stock’s market multiple.
“After adjusting estimates upward to reflect 3 cuts in ’24 and 4 cuts in ’25 (vs. 6 and 2 prior) and raising our PT by $1 to $40, we find upside limited at BAC over the next 12 months,” Najarian said.
“To be clear, there’s a lot of positive momentum at the company, from strong deposit growth, a reawakened investment banking & markets business, and the prospect for accelerating buybacks, especially in 2H24,” the analyst added.
Bank of America stock has climbed more than 11% in 2024.
— Brian Evans
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