(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.) Two companies involved in leadership shake-ups were among the stocks being talked about by analysts on Wednesday.
Several analysts raised their ratings and price targets on Starbucks a day after news that Chipotle CEO would take over at the coffee chain. Starbucks shares rallied on the news, while Chipotle shares fell. Despite the latter stock's pullback, Bernstein sees it as a buying opportunity.
Check out the latest calls and chatter below. All times ET. 5:59 a.
m.: Morgan Stanley steps to the sidelines on Intuit Near-term risks are weighing on Intuit shares, according to Morgan Stanley. Analyst Keith Weiss downgraded the software stock to equal weight from overweight.
He also lowered his price target on shares to $685 from $750, which implies just 6% upside from Monday's close. Intuit has notched strong operating margin and earnings per share growth over the last four years and managed to outperform the median large-cap software stock by more than 50%, per Weiss. However, he thinks the company's growth strategy shift toward pricing mechanisms have led to it losing ground across its portfolio.
The company launched price increases on TurboTax. "Consistent solid growth has long sustained INTU's multiple premium versus peers. Now along with the increased volatility from recently acquired CK and Mailchimp, we fear pushing too hard on price may be contributing to share losses at TurboTax and introduces risk at QuickBooks," Weiss said in a research note on Wednesday.
Intuit shares have lagged this year, rising just 3.3%. INTU YTD mountain INTU year to date — Hakyung Kim 5:52 a.
m.: Bernstein lowers price target on Chipotle Chipotle CEO Brian Niccol's sudden departure to Starbucks has created a buying opportunity into a stock that was already under pressure, Bernstein said Analyst Danilo Gargiulo lowered his price target on shares to $70 from $80. Still, his new price objective indicates 35% upside potential from Monday's close.
Chipotle shares pulled back of 7% comes as decelerating trends and a sector rotation already impacted Chipotle's multiple. To be sure, he believes Chipotle's growth story isn't over as Niccol's leaves. "We believe Niccol's departure will create short-term volatility in the stock.
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Yet Chipotle's fundamentals are unchanged," Gargiulo wrote in a Tuesday note. Since Niccol took the position of CEO in 2018, Chipotle shares surged more than 770%. CMG mountain 2018-03-01 CMG since 2018 "Net-net, while this news was a negative surprise for CMG investors, we do not think it materially alters the fundamental strength and LT course of the company, and this stock price reaction presents an attractive entry point for LT investors," Gargiulo added.
Year to date, shares are up around 15%. — Hakyung Kim 5:52 a.m.
: Analysts upgrade Starbucks after CEO change Several analysts on the Street became more bullish on Starbucks a day after the coffee chain replaced CEO Laxman Narasimhan with Chipotle chief Brian Niccol. The company on Tuesday had its best day since its 1992 initial public offering, surging 24.5%.
Take a look at what some analysts covering the stock are saying: Stifel upgrades stock to buy from hold; price target of $110 — up from $80 — implies upside of 14%: "We believe that Starbucks remains a healthy an relevant brand across most generational cohorts, but it lacks a coherent growth strategy an struggles with execution. Upon arrival, we assume Mr. Niccol's top priority will be reversing the negative U.
S. transaction trend." Deutsche Bank upgrades stock to buy from hold; price target of $118 — up from $85 — implies upside of 23%: "This is a home run hire for SBUX – Mr.
Niccol is a revered CEO with a proven track record of success in restaurants, most notably with the turnaround and outperformance at CMG. We believe Mr. Niccol's strengths in operations, marketing and innovation .
.. are particularly valuable as SBUX transitions its strategy to broaden its marketing appeal, improve operations, reinvigorate culture and enhance value messaging.
" Evercore ISI raises rating to outperform from in line; price target of $120 — up from $80 — points to a 25% gain: "With the hiring of Brian Niccol as Chairman and CEO of Starbucks, the company has a good chance to deliver against old margin targets. ..
. Importantly, we believe Brian's hiring can mark the beginning of the company truly moving from Founder-led to Founder-inspired — and this will help the company strengthen its management bench while attracting top longterm investors that are currently underweight SBUX." Baird analyst David Tarantino also upgraded Starbucks to outperform on Tuesday , noting: "We believe Niccol brings a skill set that will prove valuable in strengthening internal operating fundamentals for the company, and set the stage for healthier growth in the years ahead, and based on this outlook, we now expect sentiment on the shares to remain positive even if operating results are lackluster for the next few quarters stock struggles.
" — Fred Imbert.
