Street Calls of the Week

Pro Recap: Key Insights from Wall Street Analysts

Here’s a summary of the major developments from Wall Street analysts over the past week.

Palantir Technologies

What happened? On Monday, Raymond James downgraded Palantir Technologies from Outperform to Market Perform and removed the price target.

Highlights: The downgrade was primarily based on the stock’s valuation after a significant rise in 2024. While Raymond James maintains a positive outlook on Palantir’s long-term prospects in AI, they believe the stock needs to stabilize after its impressive gains of over 120% year-to-date and nearly sixfold in two years, especially compared to the S&P 500’s gains of 20% and 50%. The firm indicated that the inclusion of Palantir in the S&P 500 catalyzed a 23% surge recently, but significant estimate adjustments will be required to sustain further increases.

Starbucks

What happened? On Tuesday, Jefferies downgraded Starbucks to Underperform with a price target of $76.

Highlights: Jefferies cited challenges in executing strategic changes as the new CEO seeks to address operational issues, company culture, and technology concerns. The forecast for low single-digit EPS growth for FY25 is disappointing compared to the consensus. The expected shift in the price-to-earnings ratio suggests a potential downside of about 20% for the stock.

DoorDash

What happened? On Wednesday, Keybanc upgraded DoorDash to Overweight, setting a price target of $177.

Highlights: Keybanc’s optimism stems from strong growth indicators, with a recent survey showing 39% of respondents prefer DoorDash over Uber. Projections for EBITDA in 2025 and 2026 exceed consensus estimates, with expectations of substantial order growth as the company expands into new sectors. The revised price target is based on a favorable EV/EBITDA multiple.

Starbucks (again)

What happened? On Thursday, Bernstein-SocGen upgraded Starbucks to Outperform with a price target of $115.

Highlights: Analysts noted that under CEO Brian Niccol, Starbucks is poised for balanced growth, emphasizing operational stability. Anticipated changes in management and a focus on improving efficiency are expected to enhance sales growth and operating margins. This makes the stock appealing to long-term investors, with a target EPS projection suggesting significant upside.

Wynn Resorts

What happened? On Friday, Morgan Stanley downgraded Wynn Resorts to Overweight with a price target of $104.

Highlights: The firm believes Wynn’s low valuation and growth opportunities in the UAE create an attractive risk-reward scenario. Strong cash flow from Las Vegas and Boston operations is noted, though recovery in China remains critical. Estimates for Wynn’s geographical EBITDA exposure suggest significant reliance on Macau, yet future projects may serve as growth catalysts.

These insights provide a timely overview of how analysts view key players in the market, offering valuable information for investors looking to navigate their strategies.