Daily Update - February 24, 2023

Selected highlights of the day

By: Matthew Otto

Alibaba Group

  • Truist Securities analyst Youssef Squali rates a buy and increases the price objective from $120 to $130.

W

In the fourth quarter of 2022, online retailer Wayfair experienced a decline in revenue and a larger loss compared to the same quarter in 2021. Additionally, the number of active customers also decreased, according to the company’s report.

Despite the challenging market conditions and the impact of the pandemic on customer confidence, Wayfair’s CEO remains optimistic about the company’s potential to overcome these hurdles and achieve profitability.

  • Yesterday, Zachary Fadem, a Wells Fargo analyst, still keeps his Underweight rating and $35 price target citing a number of competitive, demographic, and positioning-related issues as well as weak category demand and high inventory levels.
  • Tom Forte, an analyst with DA Davidson, boosts the price objective from $45 to $49 while keeping a Buy rating.
  • Seth Basham, an analyst with Wedbush, reduces the price target from $60 to $50 while holding an Outperform rating.
  • John Blackledge, an analyst at Cowen & Co., reduces the price target from $60 to $40 while sustaining a Market Perform rating.
  • Colin Sebastian, a Baird analyst, reduces the price objective from $52 to $40 while maintaining a Neutral rating.
  • Rick Nelson, an analyst with Stephens & Co., reduces the price target from $48 to $40 while maintaining an Equal-Weight rating.
  • Stephen Ju, an analyst at Credit Suisse, reduces the price target from $124 to $108 while preserving an Outperform rating.
  • Anna Andreeva, a Needham analyst, reiterates her Buy rating and $70 price target for Wayfair.

BYND

Despite a challenging quarter, Beyond Meat reported better-than-expected results with narrower losses of $1.05 per share for the most recent period according to FactSet. Revenue was ahead of expectations yet still declined 21% year over year due to fewer pounds sold in both its retail and food service segments when compared to last fiscal cycle – highlighting an uncertain economic climate amidst this pandemic season.

As Beyond Meat charts its 2023 course, it looks to capitalize on robust revenue forecasts ranging between $375 million and $415 million. The company also anticipates a sequential rise in gross margin throughout the year that is expected to reach low double-digits. However, these ambitious goals come with numerous economic challenges – namely inflationary pressures which push consumers towards cheaper meats; macroeconomic conditions such as rising interest rates and recession fears; increased competition within plant-based meat alternatives sector and supply chain disruptions wrought by labor shortages.

  • John Baumgartner of Mizuho raising his price target from $11 to $20.
  • Alexia Howard of Bernstein increase her price target from $10 to $18.

CVNA

Carvana has reported a deepening fiscal plight with wider than anticipated losses and laggard revenue despite their endeavors to cut costs. During its fourth quarter of 2022 financial year Carvana’s earnings per share were $7.61 which is indicative of an alarming 653% higher  in comparison to the same period last year where it was only $1.02 . The firm also witnessed a 24 percent plunge in revenues at $2.837 billion from analysts estimated figures ($3 million). Similarly sales saw 23 % decrease numerically 86997 while compared with 2020 third quarter report (109 731 vehicles sold) signaling that they may be struggling against intense competition within this market.

Carvana saw a drastic fall in both vehicle sales and gross profit per unit last year, resulting in an unfavorable net loss of $15.74 for shareholders. Despite this, revenue increased by 6% to total $13.6 billion – though still beneath analyst presumptions. The pandemic’s supply chain disruption had exacerbated affordability issues caused by rising interest rates; forcing the business to realign its objectives towards cost efficiency rather than volumes sold.

  • Emmanuel Rosner from Deutsche Bank is holding a rating of Hold and has lowered the price target from $16 to $10.
  • Nat Schindler from B of A Securities is maintaining a Neutral rating but raised the price target from $10 to $12.
  • Seth Basham from Wedbush has reiterated an Underperform rating and has maintained the price target of $1.
  • John Blackledge from Cowen & Co has maintained a Market Perform rating and lowered the price target from $10 to $7.

Opendoor Technologies

Announced their quarterly financial results and surpassed expectations. The fourth quarter saw a loss of 63 cents per share on an estimated revenue of $2.9 billion, surpassing initial estimates of 81 cents per share on a $2.5 billion revenue forecast. For the entire 2022 year, the company charted a reported loss of $2.16 per share with a figure of 15.6 billion for total sales, ultimately beating expectations by thirty cent loss per share on the initial 15.2 billion expected for annual sales figures.

Carrie Wheeler Opendoor’s new CEO since December 2022 succeeding founder Eric Wu . established her check list for improvements that included stabilizing the core business operations, and returning to revised net income performance.

  • Deutsche Bank analyst Faiza Alwy is keeping her Hold rating while decreasing the price target from $10 to $8.
  • Morgan Stanley’s James Faucette has maintained his stance on Underweight for and lowered the price target from $5.5 to $5.
  • Credit Suisse’s Stephen Ju still has an Outperform rating yet decreased his price target of $13 to $10.
  • Needham’s Mayank Tandon is keeping a Buy rating yet altering his price target downwards from $10 to $9.
  • Canaccord Genuity’s Joseph Vafi stands stays with $20 stock forecast.

NKTR

Nektar Therapeutics has announced the results of the Phase 2 ISLAND study, which evaluated rezpegaldesleukin (also known as LY3471851 or REZPEG) in adults with moderately-to-severely active systemic lupus erythematosus (SLE) who were receiving standard-of-care treatment. Although the mid-dose level demonstrated a numerical improvement in SLEDAI-2K score compared to placebo, the primary endpoint was not met. However, the mid-dose level demonstrated consistent improvements for several secondary clinical endpoints, including the British Isles Lupus Assessment Group (BILAG)-Based Composite Lupus Assessment (BICLA) response and Lupus Low Disease Activity State (LLDAS). Biomarker data demonstrated that REZPEG induced a dose-dependent proliferation of T regulatory cells. Eli Lilly, Nektar’s partner, notified the company that it did not intend to advance REZPEG to Phase 3 development for SLE.

  • Jefferies analyst Roger Song has downgraded the rating on Nektar Therapeutics from Hold to Underperform, along with decreasing his price target from $3.2 to $1.5.
  • SVB Leerink analyst Daina Graybosch maintains a Market Perform rating and reduced her target price from $5 to $3.

SQ

Block reported its quarterly revenue, which stood at $4.65 billion and exceeded analysts’ expectations. Moreover, their adjusted earnings of 22 cents per share greatly disappointed projections of 30 cents. Fortunately, their gross profit of $1.66 billion, a 40% year-over-year increase, was slightly better than initially expected. Evidently, Block’s CashApp saw tremendous success in the quarter as gross profit climbed 64%. Also attractive was the 22% surge in profits from the company’s Square subsidiary.

  • Wells Fargo analyst Jeff Cantwell increased the price target from $96 to $105 and maintained an Overweight rating.
  • Baird analyst David Koning raised the price target from $85 to $92 and maintained an Outperform rating.
  • Morgan Stanley analyst James Faucette raised the price target from $67 to $72 and maintained an Equal-Weight rating.
  • Credit Suisse analyst Timothy Chiodo increased his price target from $95 to $105 and maintained an Outperform rating.
  • Wolfe Research analyst Darrin Peller also increased the price target from $80 to $95 and maintained an Outperform rating.
  • Evercore ISI Group analyst David Togut upgraded Block from Underperform to In-Line and raised the price target from $51 to $80.
  • Needham analyst Mayank Tandon maintained a Buy rating and raised his price target from $80 to $95.