Investing.com — Here’s your expert recap of the top views from Wall Street analysts over the past week.
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Confirm holding
What happened? A new analyst at Goldman Sachs issued a Buy rating on Affirm Holdings Inc (NASDAQ: ) on Monday, with a price target of $42.
What’s the full story? Goldman Sachs views AFRM as a leader in contemporary credit solutions for consumers, with a variety of products tailored for point-of-sale financing and everyday spending. Analysts are particularly interested in the complexity of AFRM’s underwriting process compared to its fintech peers and the company’s consistent delivery of well-managed credit results, even amid rapid growth that outpaces peers. This success is attributed to AFRM’s short-term receivables and transaction-level underwriting approach, which allows the company to individually evaluate and underwrite various types of consumer spending. These include everyday purchases (pay now via debit card), cash flow management or short-term financing (such as Pay-in-4) as well as longer-term installment financing options (spanning 6-12 months or more), All of this is available through a single card-based product, the Affirm Debit+ Card.
While traditional card issuers have historically provided a single revolving line of credit to meet these needs, AFRM’s approach significantly reduces costs for consumers and reduces credit risk for lenders by avoiding large pending balances. Goldman Sachs believes AFRM’s precision underwriting gives it a competitive advantage, allowing the firm to delve deeper into the credit space and expand into the subprime/quasi-subprime market space – a challenge for many established players to sustainably participate in sexual realm. Analysts expect this precision underwriting will solidify AFRM’s position in the market and contribute to its continued growth and success.
Buying at Goldman Sachs means “analysts recommend a stock as a buy or sell for inclusion in investment lists across various regions. Being assigned a buy or sell on an investment list depends on the stock’s total returns relative to its coverage universe potential.
How have stocks reacted? Affirm Holdings’ regular trading opened at $31.02 and closed at $33.70, an increase of 12.82% from the previous trading day’s regular closing price.
penn entertainment corp.
What happened? Raymond James downgraded PENN Entertainment Inc (NASDAQ: ) to market perform on Tuesday and removed his $20 price target.
What’s the full story? This recommendation change comes after May 20, when the company’s stock price rose 21% due to equity pressure and merger rumors. Initially, when reports began, Raymond James thought the stock’s potential was limited to around $20 per share. This cap is due to ongoing discounts and “penalty box” status associated with the interactive space, which is expected to continue until the interactive space establishes a clearer path to monetization or undergoes a significant strategy shift.
However, PENN’s path to profitability in the digital space remains unclear, and a major change in strategy, such as a complete sale of the company, does not appear to be imminent. Therefore, Raymond James recommends investors take advantage of recent gains and pursue more favorable risk-adjusted investment opportunities within the sector. The brokerage highlighted Caesars (NASDAQ: ) as its top pick, suggesting the company offers a more attractive portfolio proposition than PENN under current market conditions.
Raymond James’ assessment reflects a cautious stance on PENN’s short-term prospects, emphasizing the need for clarity on its digital strategy and profitability prospects.
Raymond James’ “market perform” means “the security is expected to perform substantially in line with the S&P 500 Index over the next 12 months and has the potential to be used as a source of funding for higher rated securities.”
How have stocks reacted? Penn Entertainment’s regular trading opened at $18.85 and closed at $18.26, an increase of 5.58% from the previous trading day’s regular closing price.
Tesla
What happened? Stifel initiated coverage on Tesla Inc (NASDAQ: ) with a Buy rating on Wednesday (after the bell on Tuesday) with a price target of $265.
What’s the full story? Stifel believes TSLA is well positioned to achieve strong multi-year growth beyond 2025-27. In the short term, the improved Model 3 and upcoming Model Y refresh should boost sales, followed by the start of production of the next-generation car (Model 2), which could lead to very strong demand. Stifel analysts also believe that TSLA’s artificial intelligence-based fully autonomous driving program has the potential to generate huge value through FSD sales and possible licensing agreements, and become a key driver of the long-term RoboTaxi plan.
Notable near-term risks include delivery levels following poor 1Q24 results, as well as near-term headwinds to EV adoption and the U.S. election. Stifel initiated the stock with a buy rating and a price target of $265.
A buy on Stifel means “we expect a total return of more than 10% over the next 12 months, with total return equal to the percentage change in price plus the dividend yield.”
How have stocks reacted? Tesla’s opening price on the regular trading day was US$186.69 and its closing price was US$196.37, an increase of 4.81% from the previous trading day’s regular closing price.
QJ
What happened? On Thursday, Wolfe Research upgraded Qiagen (NYSE: ) to outperform with a $50 price target.
What’s the full story? Following QGEN’s high-profile Corporate Management Day (CMD) presentation on June 17, Wolfe Research has expressed greater confidence in QGEN’s prospects. The brokerage is optimistic about QGEN’s ability to outperform rivals in the coming year as management lays out a solid strategy that will deliver organic growth of over 7% and operating margins of over 31% between 2024 and 2028.
The current portfolio is particularly attractive due to its high proportion of recurring revenue (~85%), along with multiple medium-term growth catalysts and a strong market position. Additionally, Wolfe Research does not expect QGEN’s underlying tuberculosis segment to be challenged by new competitors in the near term, trusting the company’s disciplined execution, as demonstrated by initiatives such as NeuMoDx.
Despite these positive indicators, QGEN’s shares currently trade at less than 20 times forward 12-month earnings, a discount of more than 5 times compared to peers. This valuation leads Wolfe Research to believe the stock is undervalued, providing an attractive investment opportunity with limited downside risk. Based on this assessment, the brokerage decided to revise its forecasts for 2025 and beyond, reflecting stronger confidence in QGEN’s trajectory for enhanced growth and profitability.
Wolfe Research’s analysis suggests that QGEN is well-positioned for future success, and its current share price provides investors with a favorable entry point.
Wolfe’s “outperform” means “the security is expected to outperform analyst industry coverage over the next 12 months.”
How have stocks reacted? Qiagen’s regular trading day opened at $41.02 and closed at $41.10, an increase of 1.02% from the previous trading day’s regular closing price.
letter
What happened? On Friday, Rosenblatt downgraded Alphabet (NASDAQ: ) to neutral with a price target of $181.
What’s the full story? Rosenblatt downgraded Alphabet to neutral, citing several areas of transition risk that warrant careful observation. Key concerns include the potential impact of AI on search functionality, specifically the introduction of AI overview, which could temporarily disrupt search advertising revenue. Additionally, there are signs that competition from Bing is on the rise, which could lead to a loss of search market share. Additionally, the shift of search advertising revenue to retail media networks is expected to accelerate, driven by Amazon (NASDAQ: ) and other companies entering the space, creating further uncertainty.
Another important factor is Amazon’s aggressive push into video advertising, including integrating ads on Prime Video and a strong upfront sales strategy, which could change the dynamics of ad sales, particularly affecting Alphabet’s YouTube platform. The research team also emphasized that artificial intelligence capital expenditures (capex) may increase, driven by competitive pressure within the industry.
Given these transition risks, Rosenblatt recommends taking a cautious stance on Alphabet until there is more clarity on these developments. Monitoring how Alphabet responds to these challenges will be critical to reassessing its future investment prospects.
Rosenblatt’s Neutral means “we believe the stock will perform in line with the average returns of other stocks in the sector over the next 12 months.”
How have stocks reacted? Alphabet’s regular trading day opened at $184.17 and closed at $182.15, down 1.76% from the previous trading day’s regular closing price.
