Upgrades and Downgrades by Wall Street analysts are PepsiCo, Riot Platforms, and Kingsoft Cloud, while downgrading Nuscale Power.
Ulta Beauty
Loop Capital Upgrades Ulta Beauty
- Upgraded to Buy.
- Price target: $540.
Loop Capital’s Market Outlook for Ulta Beauty
- The brokerage firm views the recent market downturn as an overreaction, especially considering Ulta Beauty’s challenging Q1 2024 comparison.
- Loop Capital predicts a rebound in Ulta’s fortunes throughout the fiscal year due to favorable year-over-year comparisons and new product launches.
- Ulta Beauty’s stock repurchase at reduced prices is seen as a strategic advantage, contributing to greater EPS growth.
- The initiation of a regular cash dividend by Ulta Beauty could trigger a significant positive trigger for the stock’s value.
- Loop Capital’s price target is anchored on a multiple of 20.3x the forecasted diluted EPS for FY24.
- Ulta Beauty’s stock traded higher on the premarket headline and closed at $452.78, a gain of 1.81%.
American Eagle Outfitters
JPMorgan Upgrades American Eagle Outfitters
- Upgraded to Overweight.
- Target price: $31.
JPMorgan’s Meeting with American Eagle Outfitters’ Executives
- Management team expresses optimism about momentum across AE and Aerie brands.
- 3-year financial plan projects consolidated revenue growth of 3-5% and mid-to-high-teens operating income growth.
- Aerie’s revenue growth is assumed to be in the mid-to-high single digits, below its historical double-digit CAGR.
- Analysts upgrade American Eagle to Overweight with a December ’24 price target of $31.
- Price target is based on 15x their FY25 EPS, 1x PEG to their FY24/25 EPS growth, or 6.7x their FY25 EBITDA.
- Overweight at JPMorgan means the stock will outperform the average total return of the stocks in the Research Analyst’s coverage universe.
CAVA Group
Argus Upgrades CAVA Group
- Upgraded to Buy.
- Set $70 price target.
Argus Upgrades CAVA Group Rating to BUY
- Argus upgraded CAVA Group’s rating from HOLD to BUY, indicating confidence in the company’s potential in the fast-casual dining sector.
- CAVA Group, specializing in Mediterranean cuisine, is well-positioned to capitalize on market opportunities.
- Key strengths include profitable operations, solid financials, and seasoned leadership.
- Despite recent public market entry, Argus finds the company’s valuation metrics mixed.
- CAVA’s price-to-earnings ratio is 200x the estimated 2025 EPS, surpassing competitors like CMG, SHAK, and SG.
- Argus sees the recent market dip as an opportunity for early investors to buy into a high-growth stock.
- The BUY rating means the stock is expected to outperform the S&P 500 on a risk-adjusted basis over a 12-month period.
Nike
Nike Upgraded by BofA
- Upgraded to Buy
- Targeted $113 price.
Nike’s Stock Elevated to Buy from Neutral by BofA
- Nike’s financial forecasts are within reach, and its transformation efforts are in full swing.
- The stock is valued at a 10-year low in terms of relative price-to-earnings (P/E).
- BofA’s analysis suggests mid-single-digit revenue growth and improved margins.
- The analyst’s new $113 price target for Nike is based on a 25 times F26 P/E ratio, down from the previous 27 times.
- Anticipation is building for Nike’s first Investor Day in seven years, scheduled for this fall.
- Nike is predicted to follow suit this year, potentially leading to a resurgence in growth fueled by new product introductions and strategic changes.
- Nike stock traded higher on the premarket headline from $89.03 to $91.18, a gain of around 2.50%.
Arista Networks
Rosenblatt Downgrades Arista Networks
- Double downgraded to Sell.
- Price target: $210
Rosenblatt’s Analysis of Arista’s AI Market Strengths
- Arista’s strengths in Data Center Switch and 400G are questioned by Rosenblatt.
- EOS, a network architecture software, may not be as effective for AI due to its repetitive nature.
- AI requires RDMA, not an extensible operating system.
- Nvidia has emerged as the primary Data Center competitor, posing significant advantages over Arista.
- Arista’s stock underperformed in the next 12 months, with a 2.22% decline on the premarket headline and 8.54% decline in the regular session.
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