(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A fast food giant was in focus among analysts Tuesday along with a key delivery company. BTIG lowered its rating on McDonald’s to neutral from buy following the company’s latest quarterly results. On a more positive note, UPS upgraded United Parcel Service to buy, calling for more than 25% upside over the next 12 months. Check out the latest calls and chatter below. All times ET. 6:38 a.m.: Negative gross margin hurts Plug Power, UBS says Gross margin appears key to improving investor sentiment on Plug Power , according to UBS. Analyst Manav Gupta downgraded the hydrogen fuel cell stock to neutral from buy. His $4.75 price target reflects the potential for the penny stock to add 9.4% over Monday’s close. “PLUG is struggling with negative gross margin … and we don’t see gross margin turning positive in 2024,” he said. “We think the only way to convince long-term investors that PLUG has fixed its cash-burn problem is to provide a concrete path to positive gross margin.” Elsewhere, Gupta said limited share upside is another justification for moving to the sidelines. That comes as the stock has recently rebounded off lows, the analyst added. Shares of the stock fell 7.5% in Tuesday’s premarket. On Monday, the stock ended down more than 6%. Plug Power has shed more than 3% so far this year, extending losses after 2023’s dive of more than 63%. The stock has ended every year down since 2020, when it soared more than 970%. — Alex Harring 6:22 a.m.: Tesla leadership drama pushes Daiwa to sidelines Leadership concerns are making the road ahead more treacherous for Tesla investors, said investment firm Daiwa. Analyst Jairam Nathan downgraded the electric vehicle giant’s stock to neutral from outperform. Nathan’s $195 price target reflects upside potential of just 7.7% from Monday’s close. Nathan cited the recent Wall Street Journal report highlighting issues within the company’s corporate governance. He noted there’s now uncertainty around potential changes to Tesla’s board or leadership. “We see corporate governance concerns aggravating already tough financial conditions in 2024,” Nathan said in a Monday note to clients. “While we see a path for longterm investors to be rewarded through a growth rebound, the recent knocks on Tesla’s corporate governance could make the path more volatile.” Changes to the board could slow decision making at the company and shorten investment time horizons, Nathan added. “Any restrictions on Tesla’s propensity to invest for the very long-term, pursuit of breaking technology/manufacturing barriers and attracting top talent could negatively impact our long-term thesis,” he said. “These risks along with a tough demand setting is likely to remove any support for the stock price.” Tesla slipped more than 2% before the bell, adding to Monday’s loss of 3.7%. Shares have dropped more than 27% in 2024, reversing course after more than doubling in value last year. — Alex Harring 6:07 a.m.: Li Auto shares can rally more than 45% following sell-off, Deutsche Bank says There’s an attractive entry point for Li Auto after a recent beating, according to Deutsche Bank. Analyst Edison Yu upgraded U.S.-listed shares of the Chinese electric vehicle maker to buy from hold, while decreasing his price target by $4 to $41. Still, his target implies shares can rally 46.4% over the next 12 months over Monday’s closing price, Yu noted the stock’s approximately 32% decline since late November. That’s compared with the KraneShares CSI China Internet ETF (KWEB) relatively muted slide of around 18% in the same time period. LI KWEB YTD mountain LI vs KWEB This underperformance comes despite Li having a “best-in-class” management team and track record of beating ambitious targets for volume and cost, the analyst said. While Yu noted that the first quarter should show some weakness, he said new and bettered models should help volume and margins recover beginning in the second quarter. Following the decline, we see “a compelling set-up in the coming quarters driven by a robust product pipeline, further supported by an attractive valuation for a top tier EV player,” Yu said. Li shares popped 8.6% before the bell on Tuesday. The stock has dived more than 25% thus far in the new year, giving up some gains after advancing 83.5% in 2023. — Alex Harring 5:58 a.m.: Sell Chegg as AI pressures margins, Piper Sandler says The most recent quarterly report was the last straw for Piper Sandler when it comes to Chegg . Analyst Arvind Ramnani downgraded the educational technology stock to underweight from neutral, while shedding 50 cents off his price target to $8.50. Ramnani’s new price target implies shares can slide 8.6% from Monday’s close. Chegg tumbled more than 7% before the bell Tuesday, the morning after the company offered light guidance for current-quarter revenue. That pulled attention away from a better-than-expected performance on the line in the fourth three-month period of 2023. “Chegg delivered modest upside on muted 4Q expectations, wrapping up a year with sustained revenue headwinds,” Ramnani said, also calling the report “lackluster.” Ramnani highlighted declining revenues from subscription services, limited visibility and competitive pressures from artificial intelligence as reasons for concern. Specifically, he said the company’s margins are under pressure given a need to improve its offerings related to AI. But he did applaud management’s spending discipline, noting it has been able to relieve some revenue margin pressure. Chegg shares have dropped more than 18% already in 2024. That builds on 2023’s retreat of around 55%. CHGG 1Y mountain Chegg in past year — Alex Harring 5:41 a.m.: Citi upgrades Palantir as earnings show signs of improvement Citi took back some of its negative sentiment on Palantir following the software provider’s latest earnings report. Analyst Tyler Radke upgraded his rating to neutral from sell and doubled his price target to $20. Radke’s new price target implies shares can climb 19.6% from Monday’s close. Palantir surged more than 18% in premarket trading on Tuesday, a day after the company said demand for artificial intelligence helped revenue exceed Wall Street revenue expectations for the fourth quarter. Meanwhile, earnings per share in the quarter and the full-year outlook came around in line with analyst forecasts. While revenue was just around 1% above the expectation, Radke said leading growth indicators like total billings and commercial were “exceptionally strong.” On top of that, he called the continued profitability strength and the “inflection” point there impressive. Even when accounting for the after-hours pop, Radke said the stock still trades at a “palpable” valuation. Elsewhere, he sees potential as free cash flow improves. “We are upgrading shares … after a stronger-than-expected Q4 and outlook that suggests some breakthrough momentum in the Commercial business,” Radke told clients. “Impressively, this is paired with significantly better free cash flow/profitability.” Tuesday’s premarket rally marked a turn for the stock, which has dropped more than 2% in 2024. That follows a strong year, as Palantir ended 2023 higher by more than 167%. — Alex Harring 5:29 a.m.: BTIG moves to sidelines on McDonald’s after earnings BTIG has a different taste in its mouth about McDonald’s following earnings. Analyst Peter Saleh downgraded the fast food chain’s stock to neutral from buy after the Monday morning financial release. He has no price target on the stock. Revenue came in lower than analysts expected in the fourth quarter, while earnings per share topped forecasts. Saleh pointed to management commentary around a pullback in the low-income consumer; a challenging landscape in Islamic countries amid the Israel-Hamas war; and expectations for slowed earnings growth as reasons for caution. “Sales trends have normalized, operating conditions have become more uncertain, and earnings upside seems more limited,” Saleh told clients Monday. “While we continue to believe that McDonald’s will take market share, accelerate development and expand operating margins, we believe sales and earnings growth are returning to more normalized levels following their multi-year boom.” With the challenges and the outlook for earnings growth at percent in the mid-single digits, Saleh said the forward multiple should likely contract modestly. That also bolsters the view for a neutral position on shares, the analyst said. McDonald’s slipped 0.7% before the bell Tuesday, building on Monday’s slide of 3.7%. Shares have fallen more than 3% in 2024. — Alex Harring 5:29 a.m.: UPS gets upgrade to buy from UBS Cost savings going forward could lead to big gains down the road for UPS , according to UBS. The bank upgraded the delivery giant to buy from neutral and hiked its price target to $175 from $160. The new forecast implies upside of 25.8% over the next 12 months. “We expect management to deliver a strong cost reduction program to support margin expansion and attractive EPS growth despite facing a backdrop of muted revenue growth,” analyst Thomas Wadewitz wrote. “On their 4Q23 earnings call, UPS unveiled a plan to reduce management headcount by 12,000, or about 14%, generating $1 bn of cost savings in 2024. This is a large step of cost reduction, but we believe there could be much more at their analyst meeting,” Wadewitz added, referring to an event se to take place next month. UPS shares are down more than 11% year to date. Last week, the company posted mixed fourth-quarter results, with earnings beating estimates while revenue fell short. UPS YTD mountain UPS year to date — Fred Imbert