(This is CNBC Pro’s live coverage of Thursday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A fast-casual food chain and a video game maker were among the stocks being talked about by analysts on Thursday. Morgan Stanley lowered its rating on Cava to equal weight, citing valuation concerns. Meanwhile, Redburn Atlantic initiated Take-Two Interactive with a buy rating. Elsewhere, Citi named Apple its top artificial intelligence pick. Check out the latest calls and chatter below. All times ET. 7:45 a.m.: JPMorgan downgrades Kohl’s to underweight Kohl’s reported net income growth and raised its full-year earnings outlook on Wednesday, but that’s not enough to hide concerning trends in the retailer’s business, according to JPMorgan. Analyst Matthew Boss downgraded Kohl’s to underweight from neutral, saying in a note to clients that sales are weak in most areas of the company. “Every single category outside of Accessories (which includes Sephora by KSS’ 10-Q/10-K filings) has seen a consecutive quarterly sales decline over the trailing 9 quarters,” the note said. Additionally, Kohl’s has a larger physical store footprint and more balance sheet leverage than its peers, according to Boss. JPMorgan has a price target of $19 per share on Kohl’s, which is less than $1 below where the stock closed Wednesday. — Jesse Pound 7:41 a.m.: Bank of America becomes bearish on Okta The headwinds surrounding Okta in the near-term are “too big to ignore,” according to Bank of America. Analyst Madeline Brooks double-downgraded shares to underperform from buy. In spite of the company’s better-than-expected second quarter results, the company’s third-quarter guidance for its current remaining performance obligations (cRPO) of 9% missed forecasts by 2%, per Brooks. She also believes revenue growth may fall to single-digits from 13% in 2024 on weakness stemming from cost optimization. “While there is a lot to like long term, including new product launches, GTM initiatives, and an improving financial profile, in our view the timing impact and nuances of the cost optimization trends are likely to outweigh the positives for the next few quarters, and we believe the stock, which has underperformed the NASDAQ YTD (+7%/+17%), could be further pressured,” Brooks wrote in a Thursday note. The analyst also slashed her price target to $75 from $135, indicating more than 22% downside potential from Thursday’s close. Shares plunged more than 12% Thursday morning. — Hakyung Kim 7:39 a.m.: Barclays upgrades Foot Locker to overweight Foot Locker is back on track for growth, according to Barclays. Analyst Adrienne Yih raised her rating on the footwear retailer to overweight from equal weight, citing the positive inflection factors for the company. She also increased her price target to $34 from $27, suggesting shares rising 15.4% from Wednesday’s close price. “We have increasing confidence that the merchandise margin recapture will have a greater impact to margins in 2H24, particularly 4Q24, as they anniversary significant levels of clearance inventory,” Yih wrote in a Thursday note. “Having said that, we believe that the near-in positive impacts of a fundamental business recovery will result in earnings and margin upside over the next 12 to 18 months.” Positive productivity impacts from the company’s new workforce management tools, an improved rewards program and the company’s marketing efforts were some of the long-term growth drivers Yih cited. Shares advanced more than 2% on the upgrade. However, the stock remains negative by around 5.5% for the year. — Hakyung Kim 7:10 a.m.: Citi names Apple its top AI pick Apple’s upcoming iPhone artificial intelligence features have Citi bullish on the stock as an AI trade. Analyst Atif Malik moved Apple above Nvidia and Arista Networks as its top AI pick heading into 2025. Citi holds a buy rating and $255 price target on shares, indicating 12.6% upside from Wednesday’s close. The broader generative AI phone market is expected to expand at a 78.4% compound annual growth rate between 2023 and 2028, Malik noted, making Apple’s AI phone features important. Developer feedback on iOS18 beta AI features including the recently launched new photo feature to remove unwanted objects points to AI as a compelling upgrade for iPhone refresh next year. We expect iPhone 16 ‘It’s Glowtime’ product launch on Sep. 9 to further highlight [the] AI phone experience,” Malik wrote in a note on Thursday. Shares advanced 1.5% Thursday during premarket trading. AAPL 1D mountain AAPL rises — Hakyung Kim 6:54 a.m.: CrowdStrike earnings ‘better than feared,’ analysts say Despite CrowdStrike’s global IT outage in July, the company managed to post a top- and bottom-line beat in the second quarter, making Wall Street analysts confident in the stock. UBS analyst Roger Boyd, who holds a buy rating on shares, increased his price target by $10 to $330 in a research note on Thursday. The new target implies 24.9% upside potential from Wednesday’s close. Despite ongoing uncertainty and the company’s reduced forward revenue guidance, Boyd said second-quarter results were “better than feared.” CrowdStrike managed to close “a few impressive deals” even after the IT outage, Boyd added. Morgan Stanley’s Hamza Fodderwala was also impressed with CrowdStrike’s second-quarter earnings report, saying that the company was able to rise “from the ashes.” The company’s net new annualized recurring revenue also grew more than consensus expectations, he added. “The falcon is also a phoenix,” Fodderwala said in a note. “Bottom line, with strong Q2 results and derisked 2H outlook, the focus now shifts to the pace of topline recovery over the next 12-18 months.” Fodderwala is looking toward the company’s upcoming analyst day on Sept. 18 and its Fal.Con conference as potential catalysts for upward movement. He holds an overweight rating and $325 price target on shares. Bank of America also reiterated its buy rating following the results. Analyst Tal Liani is confident in the company’s fundamentals, highlighting its cloud security and endpoint security segments.CrowdStrike is “taking the right steps to de-risk Street estimates,” Liani said. He holds a $365 price target on the stock. Shares slipped more than 1% Thursday morning. — Hakyung Kim 6:05 a.m.: Bernstein becomes bullish on Marriott Investors should buy into the recent dip in Marriott shares, according to Bernstein. The firm upgraded shares to outperform from market perform in a note. It also notched up its price target on shares to $262 from $247, indicating 15.1% upside from Thursday’s close. Marriott shares have declined 9% in the past six months and nearly 14% year to date amid concerns of a slowdown in consumer spending. MAR 6M mountain MAR in past six months “Marriott has opened up a record discount to Hilton despite identical guidance on NUG+RevPAR and in the next 12m we expect material progress on tech and midscale,” analyst Richard Clarke wrote. Clarke highlighted Marriott’s higher-end consumer and international exposure. “A good time to buy a high quality name at a discount,” Clarke added. — Hakyung Kim 5:44 a.m.: Morgan Stanley downgrades Cava Morgan Stanley is stepping to the sidelines on Cava after shares have more than doubled in 2024. Analyst Brian Harbour lowered his rating on the stock to equal weight from overweight. Although he raised his price target on the stock to $110 from $90, the new price target is still more than 7% lower than where shares closed on Wednesday. The downgrade is not from a lack of confidence in Cava, but a “valuation call,” per Harbour. “To be clear, we remain fans of the company and think the fundamental narrative and KPIs continue to skew positive, with a good probability of upward estimate revisions over the next 12 months, if not to the same degree as over the past 12,” Harbour wrote in a note. “But even marking our estimates above consensus here, post 2Q earnings, and sticking to our framework, we don’t have upside to our base case, and see more balanced risk-reward skew, so this is no longer a fresh money buy for us, as would be suggested by an OW rating,” he added. Nonetheless, the analyst believes Cava shares are a promising hold for longer-term investors. Shares slipped more than 3% Thursday before the bell. CAVA YTD mountain CAVA YTD — Hakyung Kim 5:44 a.m.: Redburn Atlantic initiates Take-Two Interactive as a buy Take-Two Interactive is bound to outperform going forward, according to Redburn Atlantic. Analyst Hamilton Faber initiated coverage of the video game maker with a buy rating. His price target of $194 implies upside of 22% from Wednesday’s close. “Take-Two is approximately a year away from releasing Grand Theft Auto VI, the next iteration in what is by far the world’s most successful crime video game franchise, and in a genre where the company dominates,” Faber said. “To say the launch will be transformational is an understatement. We see a tripling of operating income over the next couple of years.” “Grand Theft Auto VI” is expected to be released in 2025 after years of delay. Take-Two shares have fallen 1% this year, lagging the broader market. TTWO YTD mountain TTWO year to date — Fred Imbert
