Investing.com — A professional summary of the top takeaways from Wall Street analysts over the past week.
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Palantir Technologies
what happened? On Monday, Raymond James downgraded Palantir Technologies (NYSE:) to Market Perform and removed his price target.
*TLDR: Raymond downgraded primarily based on valuation after strong rally in 2024.
What’s the full story? Raymond James remains enthusiastic about Palantir’s long-term positioning in AI, but downgraded his rating from “outperform” to “market perform.” The company believes Palantir stock should build on its strong gains over the past few years and grow to a robust valuation. Palantir’s stock price is up more than 120% since the beginning of the year and is up nearly six times over two years, compared to the S&P 500’s 20% and 50%. Its valuation has expanded nearly five times, making it the richest software name among its peers at 26.1x. 25th fiscal year sales.
The company notes that Palantir’s inclusion in the S&P 500, announced on September 9, has driven a 23% rise in the past 14 days. Raymond James sees large positive estimate revisions as the only catalyst from here, suggesting it may take some time for the stock to consolidate its recent gains.
Market performance at Raymond James means that the security is expected to perform approximately in line with the S&P/TSX Composite Index over the next 12 months and is used to fund higher-quality securities. This means that there is a possibility that
starbucks
what happened? On Tuesday, Jefferies downgraded Starbucks (NASDAQ:) to Underperform with a price target of $76.
*TLDR: Jefferies downgraded Starbucks to Underperform, citing strategic execution challenges and low EPS growth.
What’s the full story? Jefferies lowered Starbucks’ rating to “underperform,” citing the company’s difficulty implementing necessary strategic changes despite the efforts of its new CEO. The brokerage believes that resolving issues related to operations, culture, values and technology takes time. They expect F25 guidance to reset to low single-digit (LSD) EPS growth, disappointing compared to consensus 11-12%, and US and global same-store sales. We expect that the SSS will continue to be negative.
Jefferies expects its current price-to-earnings (PE) ratio of 25x to be closer to its peers’ 23x and lower than its two-year forward P/E ratio of 21x. The brokerage firm has set a new price target of $76 based on the F26E P/E ratio of 19 times, indicating 20% downside potential.
At Jefferies, underperforming refers to securities whose total return (price increase + yield) is expected to be -10% or less within 12 months.
door dash
what happened? On Wednesday, KeyBank upgraded DoorDash, Inc. (NASDAQ:) to Overweight with a price target of $177.
*TLDR: Keybanc sees significant growth for DoorDash, with 39% favoring DoorDash over Uber (NYSE:). EBITDA is expected to be $2.6 billion in 2025 and $3.5 billion in 2026, exceeding consensus expectations.
What’s the full story? Keybanc expressed increased confidence in the consumer market since launching DoorDash before its second quarter results. The bank’s latest survey shows continued growth in the use of food delivery, with 39% of respondents favoring DoorDash, 23 points higher than Uber. Additionally, 8% of respondents use DoorDash for grocery delivery, an increase of 300 basis points from December 2023.
Looking forward, Keybanc believes that its strong core business and expansion into new areas will result in total order value growth of approximately 17% in 2025, compared to consensus of 15% and 13%, respectively. We believe this supports our revised forecast of approximately 15% in 2026. The bank also expects EBITDA to be $2.6 billion in 2025 and $3.5 billion in 2026, 3% and 6% above consensus estimates. By deferring the EV/EBITDA multiple, Keybanc reaches a $177 price target based on 20x estimated 2026 EV/EBITDA.
An overweight rating on KeyBank means the company “expects the stock to outperform the analyst coverage sector over the next six to 12 months.”
starbucks
what happened? On Thursday, Bernstein SokGen upgraded Starbucks to an outperform rating with a $115 price target.
*TLDR: Under CEO Brian Nicol, Starbucks is aiming for balanced growth with a focus on operational stability. Analysts are predicting improved margins and sales growth, making the stock attractive to long-term investors.
What’s the full story? Analysts at Bernstein Socgen say Starbucks’ organization will seek more balanced growth under the leadership of Brian Nicol, who is seen as the best-suited CEO to lead the company’s resurgence. I believe it will be reorganized. When Nicol takes over as CEO, he is expected to benefit from his experience at Taco Bell and Chipotle (NYSE:), both of which were in similar recovery modes. His appointment as CEO and chairman of the board will allow management to focus on stability rather than pursuing growth at all costs. Analysts expect further management changes and reductions in organizational structure, which should help drive the stock higher by lowering general and administrative expenses and streamlining decision-making.
Analysts expect this operational focus to reaccelerate traffic-driven comparable sales growth and return to pre-COVID-19 operating margin levels of approximately 18.5%. . Even if drink customization slows down, we expect positive traffic growth due to stable store operations, stronger brand and value recognition, and purposeful innovation. Despite investments in workforce, equipment and technology, operating margins are projected to improve to historic highs by 2028 due to sales strength and operational efficiency. Despite recent price hikes, the company’s current valuation is considered an attractive entry point for long-term investors, with FY26 normalized EPS of $4.28.
Outperforming on Bernstein SocGen means that a stock outperforms its associated index by 10 points or more.
Wynn Resorts
what happened? On Friday, Morgan Stanley downgraded Wynn Resorts (NASDAQ:) to Overweight with a price target of $104.
*TLDR: Morgan Stanley sees favorable risk-reward for Wynn due to its low valuation and UAE growth potential. Wynn’s strong performance in Las Vegas and Boston will support cash flow, but the recovery in China will be critical.
What’s the full story? Morgan Stanley cites a combination of factors contributing to this favorable risk-reward and potential rerating. These include current low valuations, undervalued growth opportunities in the UAE, and options around Macau.
Morgan Stanley highlighted strong performance in Las Vegas and Boston as contributing to Wynn Resorts’ healthy free cash flow generation. However, the bank notes that Wynn remains highly exposed to China’s macroeconomic conditions and Macau’s recovery. Despite consolidated leverage rising and estimated at around 4x by the end of 2024, Morgan Stanley expects Wynn to rapidly deleverage and have a leverage ratio of less than 16x by the end of 2022. I’m predicting.
Looking to 2025, Morgan Stanley estimates Wynn’s geographic EBITDA exposure will be approximately 50% from Macau, 40% from Las Vegas and 10% from Boston. Additionally, the bank recognizes that upcoming projects in the UAE could drive Wynn’s future growth.
Morgan Stanley’s overweight is defined as “if a stock’s total return, on a risk-adjusted basis, exceeds the average total return of the analyst’s industry (or industry team) coverage universe over the next 12 to 18 months. It means “to be expected.”
