Investing.com – Here’s a professional summary of what Wall Street analysts said over the past week.
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apple
What happened? On Monday, Loop Capital upgraded Apple (NASDAQ:) stock to Buy with a $300 price target.
What is the full story? Loop Capital has upgraded Apple based on insights from supply chain analyst John Donovan. Donovan highlights Apple’s potential to become the leading platform for generative AI in the consumer market over the next few years. This potential compares to Apple’s previous transformative impacts with the iPhone in social media and the iPod in digital content consumption, both of which have significantly boosted the company’s stock performance.
The broker’s analysis confirms that AI is a potential key growth driver for Apple. They have a price target of $300, which is 33 times the expected earnings per share of $9.00 for fiscal 2026. This valuation is at the high end of Apple’s post-Covid P/E range of 20 to 35 times. While there has been speculation about the potential benefits of AI for Apple, Loop’s upgrade is based specifically on Donovan’s detailed assessment.
Despite their optimistic outlook, Loop takes a cautious approach, noting that the full impact of AI generation on Apple’s financial metrics will unfold gradually. They argue that the upgrade reflects confidence in Apple’s ability to leverage AI generation to drive future growth, similar to the strategic advances that the iPhone and iPod made in their technological era.
“Buy on Loop means “the stock is expected to trade higher on an absolute basis or outperform the market or its peers over the next 12 months.”
How did the stock react? Apple Inc. opened the regular session at $236.20 and closed at $234.40, up 1.67% from the previous day’s close.
Shopify
What happened? On Tuesday, BofA Securities upgraded Shopify (NYSE:) stock to Buy with an $82 price target.
What is the full story? Bank of America believes the company, under new CFO Jeff Hofmeister, has turned around growth and balanced margins after years of margin decline. The research team expects strong revenue growth and free cash flow conversion from here, driven by strong core e-commerce growth in the single digits, steady equity gains and disciplined expense spending.
Bank of America notes that revenue growth and disciplined spending are leading to healthy margin expansion going forward. The bank expects an operating margin of 17.4% for fiscal 2026, up from 14.3% in fiscal 2024.
The research team also notes that normalizing the shift in product mix away from lower-margin payments should stabilize gross margin after years of decline (-650 basis points since FY17). Shopify maintains a “disciplined, limited headcount growth” trajectory as a core tenet of operating leverage.
In a positive scenario, Bank of America expects FY2030 revenues and free cash flow to be $29.4 billion (+22% CAGR) and $8 billion (+33% CAGR), respectively.
Buy from Bank of America means “the stocks purchased are expected to deliver a total return of at least 10% and are the most attractive stocks in the coverage group.”
How did the stock react? Shopify opened the regular session at $67.28 and closed at $69.75, up 8.63% from the previous day’s regular close.
1-800-Flowers.com
What happened? On Wednesday, DA Davidson downgraded 1-800 FLOWERS.COM Inc. (NASDAQ:) is expected to underperform with a price target of $8.
What is the full story? DA Davidson analyzed FLWS’s performance, noting that the company, which operates in the late-cycle consumer discretionary sector, has seen year-over-year sales declines since the pandemic ended. Sales have declined in every quarter since Q3 2022, with declines from low to mid-single digits to -8% to -18% year-over-year over the past five quarters. Prior to the pandemic, when the University of Michigan’s Consumer Sentiment Index was in the 90s and above 100, FLWS reported several quarters of organic sales growth between +8% and +10% year-over-year. Currently, Michigan’s index is in the 60s and 70s, having recovered from a low of 50 in June 2022.
The brokerage believes consumer sentiment would need to consistently exceed 80 for FLWS to return to low single-digit sales growth. Bloomberg debit card data, which is 94% correlated with sales, is showing a deteriorating trend, with a -15% year-over-year decline in Q4 2024 compared to -13% in Q3 2024. DA Davidson notes that the consensus estimate of -6% year-over-year sales for Q4 2024 may be too optimistic, potentially missing the forecast. They also expect FLWS to issue guidance for fiscal 2025 that is below market expectations due to continued recessionary consumer sentiment, weak everyday gifts, and potential cost inflation.
As a result, DA Davidson lowered its sales and EBITDA estimates for FLWS to below consensus levels. The company also lowered its target multiple from 5.5x to 5.0x and its target price from $9 to $8, based on 2025 EBITDA of $106 million (down from $109 million).
Underperformance at DA Davidson means “expected to produce a total return of -15% to +15% on a risk-adjusted basis over the next 12-18 months.”
How did the stock react? 1-800-Flowers.com stock opened the regular session at $10.40 and closed at $10.01, down 9% from the previous day’s regular close.
Doximity a company.
What happened? On Thursday, Wells Fargo downgraded Doximity Inc (NYSE:) to Underweight with a $19 price target.
What is the full story? Wells Fargo acknowledges that while Doximity has an attractive financial profile with consistent free cash flow margins above 35%, its biopharma survey indicates a slowdown in growth. This is expected to continue to drive the stock’s revaluation downward. The research team’s survey suggests that market share gains may be plateauing due to several factors. These include a shrinking percentage of customers reporting digital ad budget growth, Doximity’s customer portfolio mix approaching a plateau, and the fact that product bundling does not always translate into higher same-store sales.
Additionally, a large new account/brand in FY25 is positively impacting growth dynamics, which will likely lead to tough comparisons for FY26. Some customers have cut spending, and some competitors are gaining market share.
Furthermore, Wells Fargo notes that brand life cycles may increasingly be a drag on Doximity’s growth prospects. Customers surveyed reported less willingness to rely on Doximity to advertise for more mature brands, reflecting the research team’s channel validation. This suggests that net revenue retention may come under further pressure over time as brands mature, which in turn could lead to lower ad spend with Doximity.
An underweight on Wells Fargo means “the total return on equity is expected to lag both overweight and equal-weight rated stocks within analyst coverage over the next 12 months.”
How did the stock react? Doximity stock opened the regular session at $27.03 and closed at $27.59, down 4.83% from the previous day’s regular close.
Owens and Minor
What happened? On Friday, Citi upgraded Owens & Minor Inc (NYSE:) stock to Buy with a $19 price target.
What is the full story? The bank believes the 40% sell-off since the Q1 earnings report was overly aggressive. OMI has shown strong momentum in its core P&HS business, with the PPE inventory drawdown appearing to have ended. Longer term, Citi sees the Chinese tariffs as a potential upside for OMI’s Americas-made products. Despite recent headlines surrounding GLP-1, the bank notes that pharmacy distribution continues to grow above market expectations, a trend they expect to continue. Citi sees minimal risk to FY24 numbers, reinforcing its positive outlook.
The new $19 price target reflects a 9.3x FY25 P/E multiple and 6.0x FY25 adjusted EBITDA, well below OMI’s peers and historical valuation. The revision underscores Citi’s belief that OMI is undervalued and presents a compelling opportunity for investors with a higher risk appetite. The bank’s analysis suggests that the recent market reaction has been overly punitive, and they expect OMI to benefit from its current business momentum and favorable long-term factors.
Buying from Citi means “buying (1) ETR of 15% or more or 25% or more of high-risk stocks.”
How did the stock react? Owens & Minor stock opened the regular session at $14.75 and closed at $14.82, a gain of 1.44% compared to the previous day’s close.
