(This is CNBC Pro’s live coverage of Monday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Home improvement stocks were in focus Monday, and not in a positive way. Oppenheimer downgraded Home Depot and Lowe’s to perform from outperform, cutting its price targets on both names. On a more upbeat note, Goldman Sachs upgraded Brazilian payments stock StoneCo, calling for more gains ahead after a strong 2023. Check out the latest calls and chatter below. All times ET. 6:56 a.m.: UBS upgrades J.B. Hunt, forecasts margin expansion moving forward UBS said shares of J.B. Hunt can find meaningful growth thanks to internal margins bottoming in the fourth-quarter of 2023 and a strengthening freight cycle. The firm upgraded the transport stock to buy from neutral and increases its price target to $234 per share from $205. UBS’ forecast implies nearly 18% upside from Friday’s close. J.B. Hunt stock has ticked down roughly 1% in 2024. “We believe that JBHT’s intermodal margin performance is likely at a bottom with potential for a modest move up in 2024 and a larger step up in 2025 supported by stronger contract pricing gains (we model 5%),” analyst Thomas Wadewitz said. “We expect JBHT to show strong participation in an improving freight cycle through its intermodal business and also through its cyclical truckload and brokerage businesses.” — Brian Evans 6:26 a.m.: Morgan Stanley upgrades International Flavors & Fragrances, notes attractive valuation Morgan Stanley thinks an end to International Flavors & Fragrances downgrade cycle as well as a bottoming of the consumer cycle presents a “compelling opportunity ahead” for the stock. The bank upgraded the stock to overweight from equal weight and increased its price target to $90 per share from $81. Morgan Stanley’s forecast implies more than 13% upside from Friday’s close. International Flavors & Fragrances has slipped roughly 2% so far in 2024. Shares are coming off a rough year, losing more than 22% in 2023. “Arguably, 2024 could still be partially a year of transition, yet we think investors will look through this with the shares looking compelling,” analyst Lisa De Neve said. She added that her forecast for adjusted earnings per share is about 12% above consensus estimates for 2024 driven by a forecast 14.8% EBITDA growth this year. — Brian Evans 6:05 a.m.: HSBC downgrades Lululemon as growth slows, peers close the gap Lululemon will have trouble replicating its exceptional 2023 performance into the new year, according to HSBC. The firm downgraded shares of the athleisure company to hold from buy in its 2024 global sporting goods outlook, and left its $500 per share price target unchanged. HSBC’s forecast implies more than 3% upside from Friday’s $484.02 close. Lululemon has slipped more than 5% this year. Shares also climbed more than 50% in 2023. LULU 1Y mountain LULU in past year “The near-term growth outlook for the overall sector is challenging, and we believe it is time to be slightly more selective while picking stocks,” HSBC analyst Anne-Laure Bismuth said. “While lululemon’s fundamentals are undoubtedly best-in-class, we do not see the valuation as compelling enough for us to recommend investors buy at current share price levels.” — Brian Evans 5:45 a.m.: Oppenheimer downgrades Home Depot, Lowe’s over forecast ‘unfavorable’ 2024 guidance Oppenheimer thinks the short-term picture for shares of Lowe’s and Home Depot will be complicated by “complacent” market positioning which will pressure both stocks. The firm downgraded both stocks to market perform from outperform in a Monday note and lowered its price target to $345 for Home Depot and $230 for Lowe’s. Oppenheimer’s forecast implies roughly 5% downside moving forward for Home Depot stock and 5% upside for Lowe’s. Shares of Home Depot have added 5% so far this year while Lowe’s stock has slipped more than 1%. “[W]e are fretting that shorter-term market positioning towards HD and LOW is turning too complacent and that shares might not discount adequately for potential persistent fundamental weakness at the chains, in earlier FY24 (Jan. 2025),” analyst Brian Nagel said. “Upcoming initial 2024 guidance from HD, LOW could prove unfavorable catalysts for shares. Investors looking to play prospects for strengthening trends in the sector, and at HD and LOW, beginning later in 2024, are likely to be presented better entry points, in coming weeks and months,” he added. Both companies are slated to report earnings next month. — Brian Evans 5:45 a.m.: Goldman Sachs upgrades StoneCo Goldman Sachs thinks Brazilian payments stock StoneCo can keep going higher even after a monster performance in 2023. The bank raised its rating on the company to buy from neutral and increased its price target to $21 from $12. The new forecast calls for 23.3% upside. “Stone is our preferred name within Brazil payments, given its superior revenue and earnings growth outlook,” analyst Tito Labarta wrote. “While we expect [total payment volume] to track the industry in 2023 (11% yoy), Stone’s positioning in the MSMB segment could warrant stronger growth in 2024 (15% vs. industry at 10%), leading to a 60bps market share gain.” StoneCo shares soared 91% in 2023. The stock also popped 4.6% in the premarket. STNE 1D mountain STNE pops To be sure, Labarta said the company could be under pressure due to increased competition. — Fred Imbert
