Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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XPeng
What happened? On Monday, Citi upgraded Xpeng Inc (NYSE:XPEV) to Buy with a $29 price target.
*TLDR: Citi raises forecasts, cites strong EV demand. Upgrades stock on growth, AI prospects.
What’s the full story? Citi upgrades its 2025/26 volume forecasts to 480k/580k units, up from 260k/330k, citing strong February order intake, expected launches of 2-3 BEV and 1 EREV models, and facelifts this year. The analysts anticipate a model cycle enhancement between 2Q25 and 3Q25, with the P7+ and MONA03 expected to reach matured monthly run-rates of 20-24k units, driven by robust EV demand in 2025 and sustained export growth from China’s EV sector.
The analysts raise the 2025E P/S multiple to 2.5x, one standard deviation above the two-year average, from 1.9x, lifting the target price to $29.00/HK$113.00 from $13.70/HK$53.30. This adjustment reflects confidence in the company’s strong volume growth, supported by new model launches, a projected earnings turnaround in 2026, and potential AI/Robotics initiatives.
Citi upgrades the stock to Buy, emphasizing robust order intake and long-term growth drivers.
Lennar
What happened? On Tuesday, Keefe, Bruyette & Woods downgraded Lennar Corporation (NYSE:LEN) to Market Perform with a $141 price target.
*TLDR: KBW downgraded Lennar citing valuation risks. It awaits a better entry point.
What’s the full story? KBW downgraded Lennar noting the valuation is near parity with large-cap peers and potential downside risks to estimates. Following the February completion of the MRP spin-off, LEN’s valuation rose to 1.72x from 1.4x, compared to D.R. Horton’s 1.74x and PulteGroup’s 1.82x, narrowing its historical discount of 6-12%. The brokerage highlighted a choppy Spring selling season and growing risks to gross margins amid a challenging macroeconomic environment and lingering uncertainty around the MRP spin-off.
While KBW remained constructive on Lennar’s long-term positioning, it adopted a cautious stance, moving to the sidelines in anticipation of a more favorable entry point. The brokerage emphasized that the current valuation levels, coupled with near-term headwinds, warranted a more conservative approach to the stock.
Crocs Inc.
What happened? On Wednesday, Loop Capital upgraded Crocs Inc (NASDAQ:CROX) to Buy with a $110 price target.
*TLDR: Loop Capital bullish on attractive valuation. Hey Dude shows growth potential.
What’s the full story? Loop Capital upgrades Crocs to Buy, maintaining a $110 price target based on its discounted NOPAT model. The firm sees valuation as attractive, with the stock down 10% year-to-date versus the market’s 5% decline. Recent volatility around tariffs, coupled with management’s confidence at this week’s conference, presents a buying opportunity.
Hey Dude’s direct-to-consumer (DTC) channel is poised for growth as it laps easy comparisons, including a -11% year-over-year decline in Q1. The firm’s 1% DTC growth estimate for Hey Dude this year may prove conservative, with potential upside in Q1.
Hey Dude’s Q4 showed flat revenue, its first non-declining quarter since June 2023, a positive signal amid broader challenges. Loop Capital models a 15% Q1 decline, driven by inventory rationalization in the family footwear channel, but sees potential for DTC to outperform expectations. Management remains optimistic, citing aggressive marketing plans, including a recent partnership with Sidney Sweeney.
Under Terence Reilly’s leadership, the firm anticipates progress in boosting brand awareness in North America, which currently stands at 30%, significantly below Crocs’ core brand.
Loop Capital believes Reilly’s efforts could drive meaningful traction in 2024.
Microsoft
What happened? On Thursday, DA Davidson upgraded Microsoft Corporation (NASDAQ:MSFT) to Buy with a $450 price target.
*TLDR: Microsoft streamlines capex, prioritizing profitable AI tasks. It emerges as a defensive stock.
What’s the full story? DA Davidson believes Microsoft has wisely streamlined its capex approach, safeguarding margins and return on invested capital. After signaling an end to the AI infrastructure arms race, the company is offloading less desirable AI training workloads to CoreWeave, Oracle (NYSE:ORCL), and SoftBank (TYO:9984). This shift allows Microsoft to focus on profitable OpenAI inference tasks while maintaining its competitive edge, as competitors like Amazon (NASDAQ:AMZN) also temper their spending.
The firm sees Microsoft as the Magnificent Six’s most defensive pick, with minimal consumer exposure and resilience to economic headwinds. Its valuation, now at 27x, has become more attractive after trailing peers, following a pullback from its September peak.
DA Davidson highlights Microsoft’s disciplined strategy and stable positioning as key strengths in a challenging environment.
Peloton
What happened? On Friday, Canaccord upgraded Peloton Interactive Inc (NASDAQ:PTON) to Buy with a $10 price target.
*TLDR: Peloton leads in connected fitness. Profits set to surge.
What’s the full story? Canaccord views Peloton as the undisputed leader in connected fitness, with a loyal base of 6 million members driving high-margin recurring revenue. After navigating its boom-bust cycle, the company is rightsizing costs, improving unit economics, and fortifying its balance sheet. The analysts project adjusted EBITDA to surge to $300M-$350M in FY25, up from $3.5M in FY24, with further profitability gains expected in subsequent years.
Revenue is set to inflect in FY26 as new initiatives take hold, while subscription growth is anticipated in FY27 through expanded product offerings. Canaccord cites Peloton’s global brand strength, loyal customer base, and a return to profitability as key drivers of upside potential. The Buy rating, based on ~1.7x FY26 sales estimates, highlights the company’s turning point and long-term growth prospects.
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