7 big analyst picks: An upgrade for Nvidia | Pro Recap

By Davit Kirakosyan

Investing.com -- Here is your daily Pro Recap of the biggest analyst picks you may have missed since yesterday.

Nvidia upgraded to Overweight at Morgan Stanley

Morgan Stanley upgraded NVIDIA (NASDAQ:NVDA) to Overweight from Equalweight and raised its price target to $304.00 from $255.00.

"Having been EW for a large move in the stock, we still see indications that LLM enthusiasm is turning into stronger spending both near term and long term," said the firm, admitting they have been too data-point-oriented around a positive bigger picture, but feel the narrative is too strong to remain on sidelines.

Shares gained more than 5% yesterday.

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Bumble started at Buy at Citi

Citi started coverage on Bumble (NASDAQ:BMBL) with a Buy rating and a $24 price target.

The firm said:

Most importantly to us is that the core Bumble app has seen continued share gain within the online dating world, and recent product launches are leading to better conversion of paid users as well (which has also seen steady gains over time). Its brand message around “women first” seems to be resonating well with younger audiences and Bumble is pushing further there with greater focus on the college audience. It is also earlier in its international runway with material room for growth.

Shares were climbing 2.7% in recent trading at $19.91.

Warner Brothers upped to buy at Wells Fargo

Wells Fargo raised Warner Brothers Discovery's (NASDAQ:WBD) rating to Overweight from Equal Weight, sharply raising its price target to $20 from the prior $13.

The firm said:

After a tumultuous merger period between Discovery and WarnerMedia, the new enterprise has taken shape. ... Networks will be a managed decline, but the Studio remains steady and original content is among the best in the industry. We've stress tested the downside and expect WBD to succeed in deleveraging, and at a modest multiple that's what should create the equity upside. DTC improvement and/or future consolidation are upside optionality.

Shares were up about 0.7% at $14.26 in recent trading.

Qualcomm upgraded to Positive

Susquehanna upgraded Qualcomm (NASDAQ:QCOM) to Positive from Neutral with a price target of $140.00, noting that Asian checks suggest Chinese handset sell-through was better for both January and February.

Although there are still some inventory issues, the firm believes that the situation will be resolved within the next quarter or so. Additionally, the firm views Qualcomm's expansion into the mid-range market as being well-timed given China’s reopening.

Share rose more than 4% on the upgrade yesterday. The stock was ticking down marginally in today's session.

Chubb upgraded to Overweight at JPMorgan

JPMorgan upgraded Chubb (NYSE:CB) to Overweight from Neutral with a price target of $239, noting they still expect commercial lines pricing to slow, but this is now less of a concern given the stock's current valuation.

According to the firm, the P&C sector is less affected by issues like client withdrawals, credit deterioration, and declining rates that are affecting other financial sectors such as banks, life insurers, and asset managers. Additionally, the firm views Chubb as more defensive than its peers in a downturn.

Still, shares were off 1.9% recently.

Block upgraded to Buy, positioned to achieve the 'holy grail' of fintech

Mizuho Securities upgraded Block (NYSE:SQ) to Buy from Neutral yesterday and raised its price target to $93.00 from $80.00.

In September, the firm downgraded the stock due to several factors, including stagnant Cash App inflows per user, increased reliance on high-risk payday lending, and rising competitive pressures in merchant acquiring. Although their concerns over the sustainability of Cash App revenue persist, the firm appreciates the Block's recent commitment to cost containment.

According to Mizuho, there is potential for up to 30% upside to the company's 2023 EBITDA guide with 400-500bps further margin growth potential thereafter amid fixed cost leverage and variable cost controls.

"Plus, SQ remains uniquely positioned to achieve the 'holy grail' of creating a one-stop-shop network by connecting the point-of-sale, Cash App & BNPL ecosystems," added the firm.

Foot Locker upgraded ahead of Investor Day & Q4 earnings report

Telsey upgraded Foot Locker (NYSE:FL) to Outperform from Market Perform this morning and raised its price target to $50.00 from $39.00 ahead of the company's Q4 earnings release and investor day on Monday.

The retailer is expected to discuss strategic priorities, growth initiatives, and financial objectives. Telsey expects presentations from President and CEO Mary Dillon and other new members of the leadership team.

The firm expects Foot Locker's investor day to focus on a "consumer first" approach, noting that "Foot Locker has lost some relevance with the consumer to brands' DTC channels, specialty sneaker concepts, and national retailers that have gained access to premium footwear."

To counteract this trend, the firm predicts a sharper focus on products and strengthened relationships with brand partners, an updated loyalty program, improved in-store and online experiences, and innovative marketing strategies to regain consumer interest.

Shares gained 4% on the upgrade yesterday.