(This is CNBC Pro’s live coverage of Tuesday analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Two stocks that have underperformed are among the favorites for analysts who see opportunity ahead in the companies. A Wolfe Research analyst raised his view on troubled bank stock Wells Fargo, reasoning that regulatory and interest rate risks both are priced into the stock. Elsewhere, Bernstein slashed its price target on health insurer Humana but upgraded the stock based on its outlook. Check out the latest calls and chatter below. All times ET. 6:49 a.m.: Oppenheimer downgrades Microsoft on slow near-term growth expectations Oppenheimer has cut Microsoft to perform from outperform, saying Wall Street’s consensus revenue and earnings estimates are too high for the hyperscale tech name. “Open AI losses are the primary concern and could be in the [$2 billion to $3 billion] range in FY25, which we were not previously modeling. As per our recent AI report, enterprises have been slow to adopt AI and associated revenues will likely disappoint,” analyst Timothy Horan said in a note. “Because MSFT are investing in once-in-a-generation technology, we don’t believe expanding margins will be a short-term priority,” he added. MSFT YTD line Microsoft year to date Microsoft’s capital expenditures and depreciation expenses are rapidly rising due to investments in graphics processing units and datacenter capacity, Horan continued, adding that most of this spending will not generate a return on investment in the next couple of years. Horan noted that Microsoft is trading at the midpoint of its five-year price-to-earnings ratio range, and could trade to the lower end. He expects 3% EPS growth in the first quarter of next year and “weakish guidance” for 2025. Microsoft shares are up 8.9% this year. — Pia Singh 6:13 a.m.: Humana is now an ‘attractive’ investment, Bernstein says after health insurer’s slide Bernstein thinks the drop in Humana shares over the past week has left the stock at a strong entry point for investors. Analyst Lance Wilkes upgraded the beaten-down health insurance company to outperform even though he decreased his price target by $97 to $308, which still implies 30.3% potential upside. Humana shares are down more than 48% this year, and the stock has slid roughly 25% so far this month after the company said that a significant drop in the federal government’s quality ratings of its Medicare plans could lead to a huge revenue hit in 2026. Wilkes views risks to the stock as being incorporated into expectations and price, and said his improving sector outlook and potential upside catalysts on the stock lifted expectations as well. “We believe HUM is now an attractive investment given 1) improved operating outlook for MA; 2) reduced uncertainty on risks such as STARS ratings and repricing execution as some become realized; 3) reduced stock price; and 4) improved balance of upside risks vs downside risks (e.g. PBM outsourcing, potential takeover interest),” he said in a Tuesday note. — Pia Singh 6:03 a.m.: Wolfe Research upgrades Wells Fargo to outperform, says bad news is ‘fully baked’ in Wells Fargo’s valuation is trading at an attractive level, according to Wolfe Research. Analyst Steven Chubak updated his estimates on several large-cap bank names to reflect a lower long-term federal funds rate. Chubak sees downside to consensus 2026 earnings across the board for the group — but that the risk is better captured in the current valuation of major banks including Wells Fargo. WFC YTD line Wells Fargo stock performance Chubak upgraded Wells Fargo to outperform from peer perform and kept his $65 price target on the stock, which implies 13.7% potential upside. Wells Fargo has been one of the worst-performing stocks since the end of the second quarter amid expectations for deeper interest rate cuts, the analyst noted. Shares are up 16.1% this year. “We may be early but bad news is fully baked,” Chubak said in a Tuesday note to clients. “Our decision to upgrade WFC did not come lightly as ~9% EPS reset for ’26 is difficult to digest, and [anti-money laundering] / regulatory risks are tough to handicap. However, with shares having lagged peers … risk to cons. [Earnings per share compared to net interest income] is better understood, with valuation still too heavily discounted inclusive of deeper cuts.” — Pia Singh
