Tesla Initiation, AT&T Upgrade Among Today's Top Calls On Wall Street

On The Sidelines

Guggenheim analyst Ali Faghri initiated coverage of Tesla (TSLA) with a Neutral rating and sees a fair value of approximately $924 per share, given the analysts bull case upside to $1,963 per share and bear case downside to $350 per share. With demand outpacing supply, Faghri sees visibility to volume upside in 2022 and 2023 and views Tesla as having a favorable near-term setup, but argues that upside from current prices is "difficult to justify" despite near- and intermediate-term estimates that the analyst notes are "well above consensus."

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Faghri also started coverage of Lucid Group (LCID) with a Neutral rating and sees a fair value of approximately $38 per share, given the analyst's view on bull case upside to $83 per share and bear case downside to $12 per share. Lucid has "best-in-class" EV technology and product, as well as a vertical integration and clean-sheet strategy that will support higher margins with scale, optimized production and capital efficiency, and better product quality, but Faghri also sees near-term "narrative risks," including volume downside in the fourth quarter and fiscal 2022 due to challenges scaling production. Though the analyst is giving Lucid a premium multiple that is a 30% discount to Tesla's and credit for exceeding 2025 targets, the fair value estimate supports a Neutral rating.

Valuation, Warner Deal Benefits:

Barclays analyst Kannan Venkateshwar upgraded AT&T (T) to Overweight from Equal Weight with an unchanged price target of $30. Discovery's (DISCA) and AT&T's core valuations adjusted for the Warner deal are at historical lows, Venkateshwar told investors in a research note. The analyst believes AT&T "could be closer to a floor" than Discovery, and AT&T "will likely have more fundamental visibility and benefit from deal structure catalysts." Venkateshwar also thinks U.S. telecom companies are better positioned than cable in 2022 due to wireless trends "having relatively more visibility" versus cable, Infrastructure Act tailwinds and potential upside from new sources of revenues. AT&T and T-Mobile (TMUS) are the best ways to position for these outcomes, he added.

Expanding Addressable Market:

Daiwa analyst Stephen Bersey initiated coverage of Crowdstrike (CRWD) with an Outperform rating and $224 price target. The company's total addressable market is expanding due to post-COVID-19 planning and the stock deserves a premium multiple to its peers, Bersey told investors in a research note. The analyst sees operating leverage as Crowdstrike's revenue grows.

More Balanced Risk/Reward:

Jefferies analyst Kevin Grundy upgraded Boston Beer (SAM) to Hold from Underperform with a price target of $535, up from $440. The analyst sees a more balanced risk/reward profile with the shares down more than 60% from the highs. The "massive" reset in hard seltzer expectations has brought more reasonable estimates, Grundy told investors in a research note.

Significant Uncertainty:

KeyBanc analyst Sophie Karp downgraded Sunrun (RUN) to Sector Weight from Overweight without a price target. The analyst sees "significant uncertainty" following last week's proposed decision related to net metering reform in California. While there exists room for modification and ultimately a more constructive outcome, there is a "wide potential valuation range in various scenarios ranging" from the decision being implemented as written or modified in a variety of ways, Karp told investors in a research note. As such, the analyst views Sunrun's risk/reward as fairly balanced pending more clarity on the ultimate outcome in California.

Disclosure: None

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