Investing.com — Right here is your Professional Recap of the highest takeaways from Wall Avenue analysts for the previous week.
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Robinhood
What occurred? On Monday, Piper Sandler upgraded Robinhood (NASDAQ:) to Obese with a $23 value goal.
*TLDR: Current decline in share value presents entry level. Tailwinds for enterprise on the horizon.
What’s the complete story? Piper believes that the current pullback presents a gorgeous entry level into an modern and fast-growing brokerage platform. Within the close to time period, Piper expects web curiosity earnings (NII) headwinds from future charge 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 12 months.
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 youngsters, a robust place within the cryptocurrency market, and worldwide growth, the place HOOD remains to be within the early levels. These elements are anticipated to drive long-term development and solidify HOOD’s place out there.
Obese at Piper means “Anticipated to outperform relative to the median of the group of stocks covered by the analyst.”
Hormel Meals
What occurred? On Tuesday, Citi upgraded Hormel Meals (NYSE:) to Purchase with a $37 value goal.
*TLDR: Bettering retail gross sales developments and a benign enter price surroundings ought to increase EPS. Shares commerce as a reduction to historical past.
What’s the complete 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 developments seem like enhancing, and the enter price surroundings appears benign with falling feed prices. Moreover, manufacturing declines within the turkey business may quickly drive costs greater. 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 can 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 consider this presents a chance for buyers, given the potential for improved earnings and favorable market situations.
Purchase at Citi means “Buy (1) ETR of 15% or more or 25% or more for High risk stocks.”
Chipotle Mexican Grill
What occurred? On Wednesday, Wedbush upgraded Chipotle Mexican Grill (NYSE:) to Outperform with a $58 value goal.
*TLDR: Wedbush says CMG can maintain market share beneficial properties as difficult macro backdrop continues. Valuation is enticing.
What’s the complete story? Wedbush stories that Chipotle stays in succesful arms regardless of the upcoming departure of Brian Niccol, Chairman and CEO, who will be part of Starbucks (NASDAQ:) on September ninth. Scott Boatwright, presently Chipotle’s COO, will function interim CEO, whereas Jack Hartung, who just lately 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 developments in July. Q3 menu pricing is anticipated to align with Q2’s, with no additional pricing actions deliberate for 2024. The return of standard menu objects 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 greater margins
Outperform at Chipotle means “Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months.”
Robinhood
What occurred? On Thursday, Deutsche Financial institution upgraded Robinhood (NASDAQ:) to Purchase with a $24 value goal.
*TLDR: EPS revisions have been constructive. Administration working in a positive surroundings to maintain earnings.
What’s the complete story? Deutsche Financial institution’s choice was pushed by modestly constructive earnings revisions and the current sell-off within the inventory, with HOOD shares down practically 25% from a current 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 most effective performer year-to-date, with a 46% improve.
The financial institution sees momentum constructing for long-term earnings energy at Robinhood, supported by an enhancing enterprise diversification profile, a big selection of promising development initiatives, stable price management, and favorable leverage to sturdy secular retail developments. Deutsche Financial institution additionally notes an rising willingness to cost extra appropriately for brand new merchandise and initiatives, together with ample capability for capital return by way of share buybacks or acquisitions. Whereas Robinhood has been seen as probably 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 consider HOOD shares could be among the many most risky of their protection for the near-to-intermediate time period.
Purchase at Deutsche Financial institution means “Based on a current 12-month view of TSR, we recommend that investors buy the stock.”
Nike
What occurred? On Friday, Williams Buying and selling double upgraded Nike (NYSE:) to Purchase with a $93 value goal.
*TLDR: Rehiring of Tom Peddie as VP of Market Companions signifies potential adjustments for Nike. Expects share value appreciation as extra buyers be taught of enterprise enhancements.
What’s the complete story? Williams Buying and selling doesn’t foresee an imminent main directional change for Nike’s enterprise however believes that the current 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 adjustments had 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 adjustments mandatory. The share of Nike sneakers, particularly operating silhouettes, seen in high-traffic areas has declined from earlier years, and core prospects are much less prepared to purchase items at full value. Williams Buying and selling doesn’t consider that the Investor Day deliberate for November nineteenth, 2024, can be impacted by these adjustments. 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 serious enterprise enhancements, signaling a return of the Swoosh.
Purchase at Williams Buying and selling means “The inventory’s complete return (value appreciation plus dividend yield) is anticipated to exceed greater than 15% over the following 12-month funding horizon. “
