Investing.com — Right here is your Professional Recap of the highest takeaways from Wall Road analysts for the previous week.
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Robinhood
What occurred? On Monday, Piper Sandler upgraded Robinhood (NASDAQ:) to Chubby with a $23 worth goal.
*TLDR: Latest decline in share worth gives entry level. Tailwinds for enterprise on the horizon.
What’s the total story? Piper believes that the latest pullback gives a lovely entry level into an modern and fast-growing brokerage platform. Within the close to time period, Piper expects web curiosity revenue (NII) headwinds from future price cuts to be largely offset by elevated buying and selling exercise and margin mortgage development. Moreover, Piper anticipates that HOOD will profit from the launch of a brand new web-based buying and selling platform and the rollout of index choices and futures buying and selling later this yr.
Trying additional forward, Piper expects HOOD to profit from a number of key elements: continued development in world retail and derivatives buying and selling, the generational wealth switch from child boomers to their kids, a robust place within the cryptocurrency market, and worldwide enlargement, the place HOOD continues to be within the early phases. These elements are anticipated to drive long-term development and solidify HOOD’s place out there.
Chubby at Piper means “Anticipated to outperform relative to the median of the group of shares lined by the analyst.”
Hormel Meals
What occurred? On Tuesday, Citi upgraded Hormel Meals (NYSE:) to Purchase with a $37 worth goal.
*TLDR: Enhancing retail gross sales traits and a benign enter value atmosphere ought to enhance EPS. Shares commerce as a reduction to historical past.
What’s the total story? Citi analysts see slight upside potential to Hormel Meals’ 3Q24 and FY24 EPS, with additional upside in FY25 and FY26. Regardless of headwinds from Planters’ downtime, underlying retail gross sales traits look like bettering, and the enter value atmosphere appears benign with falling feed prices. Moreover, manufacturing declines within the turkey trade might quickly drive costs larger. Sentiment towards the shares appears skewed negatively, as Citi’s Purchase ranking is the one one amongst sell-side friends, and consensus estimates already assume HRL’s focused $250 million working revenue enchancment in FY26 will likely be unsuccessful.
The shares commerce at a premium to most meals shares however at a wider low cost to their historic P/E and EV/EBITDA multiples in comparison with meals friends. Citi analysts imagine this presents a chance for traders, given the potential for improved earnings and favorable market circumstances.
Purchase at Citi means “Purchase (1) ETR of 15% or extra or 25% or extra for Excessive danger shares.”
Chipotle Mexican Grill
What occurred? On Wednesday, Wedbush upgraded Chipotle Mexican Grill (NYSE:) to Outperform with a $58 worth goal.
*TLDR: Wedbush says CMG can maintain market share good points as difficult macro backdrop continues. Valuation is engaging.
What’s the total story? Wedbush reviews that Chipotle stays in succesful fingers regardless of the upcoming departure of Brian Niccol, Chairman and CEO, who will be part of Starbucks (NASDAQ:) on September ninth. Scott Boatwright, at present Chipotle’s COO, will function interim CEO, whereas Jack Hartung, who not too long ago introduced his retirement as CFO, will keep on indefinitely as President of Technique, Finance, and Provide Chain. The agency credit each leaders, together with Niccol, for Chipotle’s turnaround and believes the corporate is well-positioned for the long run.
Wedbush highlights drivers of second-half same-store gross sales (SSS) development outperformance versus reset expectations, noting administration’s remark of uneven gross sales traits in July. Q3 menu pricing is predicted to align with Q2’s, with no additional pricing actions deliberate for 2024. The return of fashionable menu gadgets like Brisket is anticipated to spice up Q3 comps. Moreover, margin expectations have been reset post-Q2, with meals prices and labor prices adjusted. The agency maintains its Q3 SSS development estimate of 6.0% and sees potential for margin upside as avocado costs decline and incremental comp development interprets to larger margins
Outperform at Chipotle means “Anticipate the entire return of the inventory to outperform relative to the median whole return of the analyst’s (or the analyst’s group) protection universe over the subsequent 6-12 months.”
Robinhood
What occurred? On Thursday, Deutsche Financial institution upgraded Robinhood (NASDAQ:) to Purchase with a $24 worth goal.
*TLDR: EPS revisions have been optimistic. Administration working in a positive atmosphere to maintain earnings.
What’s the total story? Deutsche Financial institution’s determination was pushed by modestly optimistic earnings revisions and the latest sell-off within the inventory, with HOOD shares down almost 25% from a latest peak in July and down 18% within the third quarter to this point. Regardless of being the worst-performing inventory in Deutsche Financial institution’s protection this quarter, Robinhood stays the perfect performer year-to-date, with a 46% enhance.
The financial institution sees momentum constructing for long-term earnings energy at Robinhood, supported by an bettering enterprise diversification profile, a big selection of promising development initiatives, stable value management, and favorable leverage to robust secular retail traits. Deutsche Financial institution additionally notes an rising willingness to cost extra appropriately for brand spanking new merchandise and initiatives, together with ample capability for capital return through share buybacks or acquisitions. Whereas Robinhood has been seen as essentially the most speculative inventory inside Deutsche Financial institution’s large-cap capital markets protection, the financial institution now sees a extra sturdy earnings profile growing and among the substantial dangers moderating. Nonetheless, they nonetheless imagine HOOD shares might be among the many most unstable of their protection for the near-to-intermediate time period.
Purchase at Deutsche Financial institution means “Primarily based on a present 12-month view of TSR, we suggest that traders purchase the inventory.”
Nike
What occurred? On Friday, Williams Buying and selling double upgraded Nike (NYSE:) to Purchase with a $93 worth goal.
*TLDR: Rehiring of Tom Peddie as VP of Market Companions signifies potential modifications for Nike. Expects share worth appreciation as extra traders be taught of enterprise enhancements.
What’s the total story? Williams Buying and selling doesn’t foresee an imminent main directional change for Nike’s enterprise however believes that the latest rehiring of Tom Peddie because the VP of Market Companions signifies that change is brewing. Nike’s wholesale companions have expressed satisfaction with Mr. Peddie’s return and are starting to see extra centered consideration on their accounts. Given Mr. Peddie’s departure in 2020 after 30 years with the corporate, Williams Buying and selling believes he wouldn’t return with out confidence that additional modifications have been in course of.
The brokerage notes that Nike’s 4Q24 outcomes and FY25 outlook, together with the notion that Nike is dropping its luster, make modifications obligatory. The share of Nike footwear, particularly working silhouettes, seen in high-traffic areas has declined from earlier years, and core clients are much less keen to purchase items at full worth. Williams Buying and selling doesn’t imagine that the Investor Day deliberate for November nineteenth, 2024, will likely be impacted by these modifications. The brokerage expects that it’s going to take 15-18 months from the day a change happens till true evolution is realized, probably by spring 2026. Regardless of the challenges, Williams Buying and selling believes that Nike’s inventory will admire forward of great enterprise enhancements, signaling a return of the Swoosh.
Purchase at Williams Buying and selling means “The inventory’s whole return (worth appreciation plus dividend yield) is predicted to exceed greater than 15% over the subsequent 12-month funding horizon. “