Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Oracle
What happened? On Monday, Erste Group upgraded Oracle Corporation (NYSE:ORCL) to Buy without a price target.
*TLDR: Erste expects increased operating margin and continued stock upward trend. Software offerings and 162 data centers boost sales and profit growth
What’s the full story? Erste analysts highlight that Oracle's attractive software offerings have significantly improved its sales situation. Oracle is expanding its cloud services with new data centers, now totaling 162 either operational or under construction. Additionally, 42 new cloud GPU contracts were signed in the first quarter, setting the stage for strong sales and profit growth in the current and next fiscal year.
The analysts also expect an increase in the operating margin and note that the stock is favorably valued based on its P/E ratio. Given these factors, Erste believes the stock’s upward trend is likely to continue.
Buy at Erste means “Expected total return p.a. > +15%.”
Ford
What happened? On Tuesday, Goldman Sachs upgraded Ford (NYSE:F) to Buy with a $13 price target.
*TLDR: Goldman sees Ford Pro’s profitable commercial business and software growth driving margin opportunities.
What’s the full story? Goldman sees a margin opportunity for Ford driven by its profitable commercial business, Ford Pro, which has mid-teens EBIT margins, and a growing software and services mix. The bank highlights Ford’s target of $1 billion in software revenue by 2025 and aims for software and physical services to constitute 20% of Pro EBIT by 2026. With paid subscriptions growing at a 35-40% CAGR, Goldman identifies long-term opportunities in fleet services and ADAS.
Despite the stock being down 13% year-to-date due to cyclical concerns and higher-than-expected warranty costs, Goldman notes it is trading at just 5x the next twelve months (NTM) EPS estimate, at the lower end of the historical range. The bank sees a 23% upside to its new 12-month price target of $13, with a total return of approximately 30% including the 6% dividend yield.
Buy at Goldman Sachs means “Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by the FINRA Rules. “
Harley-Davidson
What happened? On Wednesday, Baird downgraded Harley-Davidson (NYSE:HOG) to Neutral with a $40 price target.
*TLDR: Dealers report weak retail, excess inventory, and negative sentiment, risking Harley-Davidson’s guidance. Baird advises caution due to stakeholder frustration and challenging market conditions.
What’s the full story? Baird reached out to Harley-Davidson dealers to gather insights on Q3 trends. The feedback from dealers highlighted weak retail performance, excess inventory, and a generally negative sentiment, all of which indicate potential risks to the company’s guidance. This summer, Harley-Davidson was frequently in the news for unfavorable reasons, further exacerbating frustration among stakeholders.
Despite recognizing the inherent value of the Harley-Davidson brand, Baird notes that the negative feedback from riders, dealers, and shareholders has created a challenging environment this season. Given these factors, Baird suggests it might be prudent to adopt a cautious approach at this time.
Neutral at Baird means “Expected to perform in line with the broader U.S. equity market over the next 12 months.”
Shoals Technologies Group
What happened? On Thursday, Citi upgraded Shoals Technologies Group Inc (NASDAQ:SHLS) to Neutral with a $5.50 price target,
*TLDR: Stock aligned with target; balanced risk/reward; patent case largely resolved. Downside risks: Voltage AD product launch, rising competition, and margin volatility.
What’s the full story? Citi analysts note that the stock is currently aligned with their target, presenting a balanced risk/reward scenario. The primary catalyst, a patent infringement case, has largely concluded with the ALJ recommending a limited exclusion order. Additionally, concerns over “shrinkback” have mostly been resolved, and endorsements from Blattner and top 10 EPC MSAs provide confidence. However, guidance and a modest utility-scale growth outlook have tempered expectations.
The analysts highlight potential downside risks, including the imminent launch of an AD product by Voltage, which will not be affected by the exclusion order. Rising competition and a relatively high margin outlook also pose risks. In the short term, gross margins may experience volatility as factories operate concurrently before consolidating operations.
Neutral at Citi means “For stocks rated Neutral (2), if an analyst believes that there are insufficient valuation drivers and/or investment catalysts to derive a positive or negative investment view, they may elect with the approval of Citi Research management not to assign a target price and, thus, not derive an ETR. “
M&T Bank
What happened? On Friday, Wolfe upgraded M&T Bank (NYSE:MTB) to Outperform with a $210 price target.
*TLDR: Wolfe expects M&T Bank to maintain peer-leading NIMs through 2026.
What’s the full story? Wolfe anticipates that M&T Bank will continue to generate peer-leading Net Interest Margins through 2026. Unlike some of its peers, MTB’s NIM has not been significantly impacted by underwater cash flow swaps, and its noninterest-bearing deposit mix is approximately 280 basis points higher than the average of Wolfe’s coverage. This supports Wolfe’s belief that MTB will maintain its NIM advantage through 2026.
The brokerage currently models MTB’s NIM at 3.67% for 2025 and 3.72% for 2026, compared to the Mid-Cap Bank average of 3.07% and 3.15%, respectively. This projection underscores Wolfe’s confidence in MTB’s ability to outperform its peers in terms of NIM over the next few years.
Outperform at Wolfe means “the security is projected to outperform analyst's industry coverage universe over the next 12 months.”