Tuesday's Analyst Calls: Wells Fargo Gets a Downgrade, Legacy Tech Stock to Pop 20%

Tuesday's notable analyst calls centered around a major U.S. bank and a prominent name in the legacy tech sector.

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Compass Point made headlines by downgrading Wells Fargo to a neutral rating following a robust start to 2024. Conversely, Morgan Stanley re-entered the scene by resuming coverage of Cisco Systems with an overweight rating, projecting promising gains ahead.

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Here's a rundown of the latest analyst calls and market discussions, all presented in Eastern Time:

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8:02 a.m.: Bank of America upgrades Ally FinancialBank of America revised its outlook on Ally Financial, foreseeing potential earnings growth for the financial services company. Analyst Brandon Berman upgraded the stock from neutral to buy, citing the possibility of further upside beyond the implied $42 mark, representing a 9% increase. Berman also highlighted the company's balance sheet actions aimed at reducing earnings volatility in the future. Shares showed a nearly 2% rise in premarket trading.

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7:55 a.m.: Bank of America calls Freeport-McMoRan a stock with ‘blue chip copper exposure’Bank of America upgraded Freeport-McMoRan, emphasizing the company's positioning for growth amid a copper supply squeeze. Analyst Lawson Winder raised the mining company's rating from neutral to buy, setting a price target of $59, indicating an 18% potential upside. Winder noted the constraints in copper mine supply and steady demand, projecting a rise in copper prices. The analyst also praised Freeport-McMoRan's efforts to enhance its business operations, labeling it as a stock with "blue chip copper exposure."

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7:39 a.m.: Barclays downgrades American ExpressBarclays adjusted its stance on American Express, downgrading the credit card issuer from overweight to equal weight. While maintaining a favorable long-term view, analyst Terry Ma expressed concerns about the current risk-reward balance, prompting the downgrade. Ma raised the price target slightly to $221 per share, with a forecast indicating a slight downside from the previous close. The analyst highlighted potential risks associated with revenue growth and valuation.

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7:32 a.m.: Goldman Sachs says GE Aerospace has upside ahead as engine demand soarsGoldman Sachs provided insights into GE Aerospace, anticipating growth opportunities fueled by a surge in aircraft engine demand. Analyst Noah Poponak reiterated a buy rating on GE Aerospace, setting a price target of $190 per share, reflecting a 21% potential upside. Poponak emphasized the disparity between supply and demand for aircraft engines, suggesting strong pricing power. The analyst also highlighted the potential for fleet extensions, particularly benefiting CFM56. GE stock has experienced significant growth in 2024, soaring nearly 54%.

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7:04 a.m.: JPMorgan upgrades American Eagle OutfittersJPMorgan revised its outlook on American Eagle Outfitters, upgrading the apparel stock from neutral to overweight. Analyst Matthew Boss raised the price target to $31 per share, indicating a nearly 27% upside. Boss praised the company's focus on merchandising initiatives and operational changes as growth catalysts. Additionally, the analyst highlighted the company's favorable valuation relative to fair value and anticipated revenue growth and EBIT margins. American Eagle Outfitters has seen a considerable rise in 2024, climbing over 15%.

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6:35 a.m.: Goldman Sachs upgrades Molson CoorsGoldman Sachs upgraded Molson Coors, citing growth potential driven by expanded shelf space and favorable market reception. Analyst Bonnie Herzog upgraded the beer stock to buy, setting a price target of $75 per share, indicating a 13% potential upside. Herzog highlighted the company's favorable positioning against competitor Bud Light and anticipated a Q1 beat reflecting improved outlook on shipment/depletion growth. Molson Coors shares showed a modest increase.

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6:15 a.m.: Goldman Sachs cuts Tesla price target and estimatesGoldman Sachs adjusted its forecasts for Tesla following the company's first-quarter delivery miss. Analyst Mark Delaney reiterated a neutral rating on the electric vehicle stock, lowering the price target to $175 per share, reflecting a slight upside. Delaney expressed concerns about near-term fundamentals and highlighted potential risks related to vehicle price reductions, competition in the EV market, and operational challenges. Tesla shares have struggled in 2024, dropping by 30.4%.

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5:52 a.m.: Morgan Stanley says Cisco will jump 20%Morgan Stanley expressed optimism about Cisco Systems, anticipating significant growth potential for the tech company. Analysts resumed coverage with an overweight rating and a price target of $58 per share, implying a more than 20% potential upside. Marshall's bullish outlook is supported by end-market growth and Cisco's acquisition of software company Splunk. The analyst noted the positive impact of Splunk's integration on Cisco's portfolios and projected stronger growth ahead. Cisco has experienced a slight pullback in 2024, declining by approximately 5%.

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5:52 a.m.: Compass Point downgrades Wells FargoCompass Point downgraded Wells Fargo, suggesting profit-taking on the banking giant's shares. Analyst David Rochester shifted the rating from buy to neutral, citing a more balanced risk-reward profile amid expectations of declining interest rates. While acknowledging potential positives for the stock in the coming year, Rochester cautioned against overestimating catalysts following significant strength in the shares year-to-date. Wells Fargo shares remained flat following the downgrade.

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