(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major U.S. homebuilder was in focus Wednesday among analysts. KBW upgraded D.R. Horton , citing a favorable backdrop for the housing market. Shares ticked slightly higher in the premarket. Not everyone was so lucky to get an upgrade, however. HSBC downgraded Ferrari to hold from buy. The stock fell slightly on the back of the rating change. Check out the latest calls and chatter below. 6:03 a.m. ET: Thermo Fisher Scientific is a standout life sciences play, Wolfe Research says Wolfe Research initiated Thermo Fisher Scientific as a top pick in life science and diagnostics tools stocks, which remains an “attractive industry,” according to Wolfe Research. Analyst Doug Schenkel assigned an outperform rating to the stock with a $575 price target, implying shares stand to gain 15.6% from the stock’s latest close at $497.37. Shares are down 9.7% for the year, fueled by declining sales due to lower Covid-19 product demand but have gained 11.7% over the past month. “We expect that TMO shares will outperform the peer group over the next year as confidence builds in the outlook for a return to MSD/HSD revenue growth and sustained margin improvement,” Schenkel wrote in a Wednesday note. “We also note that TMO management is top-tier when it comes to “playing offense when others are playing defense” – we estimate TMO has $20-30B to deploy. We also view 2024 estimates as de-risked.” The analyst expects revenue growth over the next decade, which contributes to the stock’s “compelling” risk/reward. — Pia Singh 5:57 a.m. ET: JPMorgan lowers outlook on R1 RCM after company’s business transformations Analyst Anne Samuel downgraded R1 RCM to neutral, citing changes in the company’s business strategy. Over the past two years, the health care revenue management firm acquired peer company Cloudmed, subsequently oversaw a management transition and then acquired revenue cycle management company Acclara in December. “Following a series of transformative events, we see less visibility in the model drivers and go-forward strategy combined with NT pressure on the growth algorithm from acquisition integration,” Samuel wrote about the stock. “We are stepping to the sidelines as we await management execution on integrating so many moving pieces, which result in reduced visibility.” The stock has been under pressure in the past six months, losing 40%. Year top date, it’s down 7.6%. RCM 6M mountain RCM in 2023 — Pia Singh 5:36 a.m. ET: Shares of homebuilder D.R. Horton could continue rallying next year, says KBW Keefe, Bruyette & Woods upgraded D.R. Horton to outperform from market perform, driven by its increasingly positive outlook on homebuilders and mortgage servicers into next year. Shares of the homebuilding company have gained 56.8% this year. DHI YTD mountain DHI in 2023 “We view current housing supply/demand dynamics as favorable on net for the homebuilders and believe they have more room to run. The sector has outperformed YTD, up 65% vs. the S & P 500’s 20%. Despite the rally, valuations are below historical averages,” the firm wrote in a Tuesday note. “For homebuilders, we believe new home sales and public builderse can continue to gain share on account of land, better capitalization than private developers, and mortgage buydown incentives,” the firm wrote in a Tuesday note, adding that house prices will still remain stubbornly high and low in supply, however. “While growth is modest, existing sales will remain anemic, hovering near the lowest per capita since 1970.” — Pia Singh 5:36 a.m. ET: HSBC downgrades Ferrari The bank lowered its rating on Ferrari to hold from buy, citing limited earnings growth potential heading into the new year. “Margin improvement and cash generation are ahead of mid-term targets – 2024e EBIT consensus is already at the lower end of the 2026e targets but these targets (according to management) are unlikely to be revised before 2025,” analyst Michael Tyndall wrote. “As a result, the potential for mid-term earnings upgrades and results surprise has diminished,” Tyndall added. “We also observe that historically Ferrari has had a very small earnings surprise in 4Q, likely because it manages its deliveries in a way to achieve or slightly outperform its guidance.” Ferrari’s U.S.-listed shares have been on a tear this year, surging 73%. Earlier this week, they hit an intraday all-time high of $372.42 per share. RACE YTD mountain RACE in 2023 — Fred Imbert
Wednesday’s analyst calls: Homebuilder stock upgrade, Ferrari downgrade
