(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.) Salesforce and Goldman Sachs were the subject of major analyst calls on Wednesday. Shares of Salesforce were named a top pick by Oppenheimer. On a more negative note, Goldman was downgraded to market perform by BMO, with the firm noting shares could cool down after a strong end to 2023. Check out the latest calls and chatter below. All times ET. 7:02 a.m. ET: Redburn Atlantic downgrades Apple stock on limited multiple expansion opportunities Redburn Atlantic doesn’t see much room for upside left for Apple in 2024. The technology titan had an exemplary year in 2023, rising more than 48%. However, this rally has now contributed to Apple stock trading at a premium of more than 20%, according to Redburn. Analyst James Cordwell downgraded the stock to neutral from buy. He retained his year-end 2024 price target of $200, implying just 8% upside. “While we expect the iPhone to return to growth in CY24, we see little room for upside over the next few years, and an anticipated underwhelming March quarter could impact confidence in this outlook,” he wrote. “At the same time, there appears to be rising regulatory risk that may impact Apple’s ability to monetize its ecosystem.” Cordwell believes that both the products and services sides of Apple’s business face upcoming challenges that would limit multiple expansion. Specifically, rising competition in China pose risks to the growth of the iPhone market. On the services side, the analyst pointed to Alphabet’s antitrust as a limiting factor. “We estimate that over 40% of Services operating profit is derived from payments by Google to be the default search provider on the iPhone. Alphabet’s involvement in this deal has been subject to an antitrust case brought by the Department of Justice, creating some uncertainty regarding the long-term security of this revenue stream,” he wrote. — Lisa Kailai Han 6:29 a.m. ET: Susquehanna upgrades United Airlines, downgrades Alaska Air As idiosyncratic factors drive returns for airlines in 2024, Susquehanna expects United Airlines to come out on top, while Alaska Air is likely to fall behind. The firm upgraded United Airlines to positive from neutral, lifting its price target to $60 from $40. The new forecast implies nearly 38% upside from Tuesday’s close. “We believe that the core elements of UAL’s United Next plan will help drive margin expansion and earnings growth into mid‐decade/FY25,” wrote analyst Christopher Stathoulopoulos. He cited catalysts such as a favorable premium seat and revenue mix, enterprise cost savings efforts, robust loyalty program and leading international network as reasons for the upgrade. The analyst also downgraded Alaska Air Group to neutral from positive. Stathoulopoulos’ revised price target of $40, up from $39, implies that shares could rise another 7%. “We see a challenging operating environment for ALK and LCC peers into 2024, given excess US domestic capacity, slowing leisure demand, and plateauing volumes for business travel,” the analyst wrote. However, he added that the airline’s balance sheet remains solid. The airway stock has slid more than 4% this year, after a door panel on a Boeing 737 Max 9 plane blew out midway during an Alaska Airlines flight last week. In response, both Alaska and United Airlines grounded their entire fleet of the planes immediately after the incident. — Lisa Kailai Han 5:58 a.m.: Anheuser-Busch could come out on top of a growing beer outlook, Jefferies says Anheuser-Busch InBev is primed for a comeback after a tough year, according to Jefferies. The investment firm upgraded the beer giant to buy from hold rating in a Wednesday note. It also raised its price target on U.S.-listed shares to $76 from $60. The new target implies upside of 16.9%. Mundy cited an improving growing beer outlook as a boon for the company. “After a period of extreme volatility, beer category prospects are underappreciated … we expect global beer volumes to grow 1-2% with F24 the first ‘normal’ year since 2019,” he wrote. “With a leadership position in seven of the 10 largest future growth markets, ABI’s footprint is well positioned to capture this growth.” Specifically, the analyst thinks that Anheuser-Busch has now come to an inflection point that should set it up for success. For instance, he foresees the company’s margins will expand as cost pressures ease in 2024 due to a more stable foreign exchange environment and increasing operating leverage benefits. Mundy also underscored the firm’s recent stock buybacks as an additional positive for the stock. He added that should Bud Light recapture the volume it lost last year, it could rise to one of the top three global growth brands. “Our base case is that BL volumes stabilize from April onwards as you can’t lose consumers twice,” Mundy wrote. “Recapture of a quarter of the lost volume, alongside momentum in the broader portfolio could see the US growing volumes 2-3% and sales MSD, which looks like a historic spirits run rate.” Bud Light sales were under pressure last year after backlash from the brand’s partnership with transgender influencer Dylan Mulvaney. The decline allowed for rival Modelo Especial to overtake Bud Light in U.S. sales. Anheuser-Busch shares rose just 7.6% in 2023, lagging the broader market. — Lisa Kailai Han 5:43 a.m.: BMO downgrades Goldman Sachs, cites increasing revenue volatility Shares of Goldman Sachs have run up too much and are due for a pullback, according to BMO Capital Markets. Analyst James Fotheringham downgraded Goldman Sachs to market perform from outperform, decreasing his price target to $357 from $421. The revised forecast implies the stock could fall 7%. Goldman Sachs rose 12% in 2023, lagging the S & P 500. However, shares, rallied more than 30% from an October low into year-end. GS 1Y mountain GS in past year “We worry more about the potential valuation implications of increasing pro forma exposure to potentially volatile capital markets revenues, as well as pressures on GS’s highly-coveted corporate culture exerted by shrinking revenue pools in some of GS’s key markets,” Fotheringham wrote. The analyst noted that investment banks such as Goldman Sachs are less exposed to credit and liquidity risks than other financial institutions. On the flip side, however, he wrote that they’re more exposed to market risks, such as volatility in fees and revenues, and regulatory risks, which come in the form of higher capital requirements. In fact, Goldman Sachs already derives two-thirds of its revenue from its global banking and markets businesses. These businesses are still gaining market share, which means that Goldman will find itself “increasingly exposed to capital markets-driven revenue volatility,” Fotheringham added. Meanwhile, the analyst noted that revenue volatility could place downward pressure on Goldman’s long-standing corporate culture. “Increasingly volatile markets-sourced revenues need to keep up with GS’s partnership compensation pool; this highlights culture sustainability concerns,” he wrote. — Lisa Kailai Han 5:43 a.m.: Oppenheimer names Salesforce a top pick Salesforce is the software-as-a-service stock to own in 2024 as enterprise IT budgets recover. “We are attracted by Salesforce’s positioning in 2024 as an enterprise front office supplier, which we expect to increase in prioritization in IT budgets throughout the year as uncertainty about the future macro direction wanes and the business cost optimization cycle enters the later innings for new investments,” analyst Brian Schwartz wrote. The analyst called Salesforce a “good EPS compounder,” noting the company can grow earnings by more than 20% in fiscal 2025. He also expects the company to hold an investor day “that raises the medium-term operating margin profile of the business, provides support to a durable growth trajectory and is a positive stock catalyst.” Oppenheimer has an outperform rating on Salesforce and a price target of $300 per share, implying upside of nearly 15%. Salesforce shares are coming off a monster year, rallying 98% in 2023. In early 2024, the stock is down slightly. CRM 1Y mountain CRM in past year — Fred Imbert
Wednesday’s analyst calls: Salesforce named a top pick, Goldman Sachs gets a downgrade
