4 big analyst picks & cuts: Adobe cheered on AI prospects; Carvana axed again

Here is your Pro Recap of the biggest analyst picks and cuts you may have missed today: Upgrades at Adobe, Wayfair, and Chevron, and a downgrade at Carvana.

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Adobe gains on Morgan Stanley upgrade

Adobe Systems (NASDAQ:ADBE) shares gained more than 2% pre-market today after Morgan Stanley upgraded the company to Overweight from Equalweight and raised its price target to $660.00 from $510.00, as reported in real-time on InvestingPro.

The analyst cited increased clarity on AI-enabled products and the roadmap for monetization have bolstered their confidence in Creative Cloud's organic growth potential. The firm added that the expectation of mid/high-teens EPS growth within the next three years provides further justification for a hiked multiple and price target.

Carvana slashed to Underperform at Jefferies

Jefferies downgraded Carvana (NYSE:CVNA) to Underperform from Hold and cut its price target to $30.00 from $55.00, representing the fifth downgrade this month.

Consensus appears to overestimate the sustainability of recently elevated profitability, which we believe benefited from transitory tailwinds that will abate in the coming quarters. Our revised '24 GPU/EBITDA are ~10%/45% below the Street, despite us assuming per unit economics remain well above prepandemic levels.

Shares were losing 1.2% in premarket trading.

Wayfair shares jump on upgrade

Piper Sandler upgraded Wayfair (NYSE:W) to Overweight from Neutral and raised its price target to $97.00 from $35.00. As a result, shares jumped over 8% pre-market today.

The upgrade was driven by stabilizing the home furnishings industry, improving sales, positive supplier feedback, attractive valuation, and the potential for sustained EBITDA profitability.

The company is set to report its Q2/23 earnings on Thursday before the market opens.

Chevron earns an upgrade at Goldman Sachs

Goldman Sachs upgraded Chevron (NYSE:CVX) to Buy from Neutral with a price target of $187.00, following the company’s reported Q2 beat on Friday.

We upgrade Chevron from Neutral to Buy on (a) leading capital returns; (b) clear inflection in cash flow in 2024 and volumes in 2025; and (c) relative valuation, particularly in 2025.

Shares gained more than 1% pre-market today.

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