Thursday’s analyst calls: Upside ahead for Amazon and Meta, but a ‘rate trap’ looms for BofA

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Traders work on the floor of the New York Stock Exchange during afternoon trading on April 02, 2024 in New York City. 

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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.

Other analysts saw upside for Coinbase and Meta Platforms as the social network builds advertising market share.

Check out the latest calls and chatter below. All times ET.

6:42 a.m.: Morgan Stanley’s Adam Jonas trims Tesla price target

Morgan Stanley’s head of U.S. auto coverage Adam Jonas says Tesla’s weaker-than-expected first-quarter deliveries will find a bottom by the second quarter, but is a sign of continuing headwinds in the electric vehicle sector.

The analyst reiterated his overweight rating on Tesla stock but lowered his price target slightly to $310 per share from $320. Jonas’ forecast implies more than 84% upside from Wednesday’s $168.38 close.

Tesla stock has pulled back more than 32% in 2024.

“Negative developments in the global EV market very much matter to Tesla and should reasonably have a negative near-term impact on the price of the stock,” Jonas wrote. “At the same time, however, we believe investors should not ignore the continued developments of Tesla’s other plays, many of which are auto-related (i.e. the recurring revenue opportunity from the Tesla fleet – embedded in our Tesla Network Services valuation) and other areas that we do not include within our $310 target.”

“We think numbers bottom by 2Q results, well before a major rejuvenation of the model cycle,” Jonas said of Tesla’s vehicle deliveries moving forward. Tesla shares rose less than 1% premarket.

— Brian Evans

6:28 a.m.: Oppenheimer raises Coinbase price target on growing adoption, room for higher earnings estimates

The continued adoption of digital assets and blockchain technology can help Coinbase remain a key beneficiary in the cryptocurrency sector over the long-term, according to Oppenheimer.

The firm reiterated a buy rating on the crypto exchange stock and raised its price target to $276 per share from $200. Oppenheimer’s forecast equates to roughly 10% upside from Wednesday’s $251.58 close.

Coinbase stock has climbed more than 44% in 2024.

“We view COIN as an enabler of crypto innovation, which solves some pain points in the existing financial system, and one of a few remaining exchanges in this space,” analyst Owen Lau said.

“As a leader in the cryptoeconomy, COIN is well positioned to benefit from the mass adoption of digital assets, we believe,” he added.

Coinbase shares rose nearly 1% in premarket trading.

— Brian Evans

6:19 a.m.: Jefferies raises Meta Platforms price target on forecast higher advertising market share

Jefferies says strength in Meta Platforms‘ advertising revenue growth could see the company surpass Amazon’s ad business for the first time in nine years.

The firm reiterated a buy rating on Meta stock and raised its price target to $585 per share from $550 on Thursday. Jefferies’ forecast implies more than 15% upside from Wednesday’s $506.74 close. Meta stock has surged more than 43% in 2024.

“With Q1’24 rev guidance calling for even greater outperformance, we believe Meta could capture as much as 50% of incremental industry ad dollars (vs. 33% in 2023), which would be the most in company history,” analyst Brent Thill said. “In fact, we now estimate that in 2024 Meta’s ad business could outgrow Amazon’s for the first time since 2015.”

The analyst also lauded the company’s suite of generative artificial intelligence products which he says will be a key driver for further capturing advertising dollars.

“As a reminder, Meta last disclosed in 2021 that they had 10M advertisers on the platform vs. 200M+ businesses implying there is still ample runway to convert non-paying businesses into advertisers,” he said.

Meta shares rose 1.4% in premarket trading.

— Brian Evans

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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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