It may be the holiday season on Wall Street, but that doesn’t mean analysts aren’t out and about making calls into year-end.
Here are three notes that caught my attention before 6 a.m. ET.
After a recent management meeting, JPMorgan’s longtime retail analyst Matt Boss is upgrading his rating on Gap (GAP) to Overweight (Buy equivalent). His price target went to $30 from $28.
“With the foundation set under CEO Richard Dickson to support a consistent playbook of improved merchandising & marketing across all four brands, we see Gap at an inflection point to support low-to-mid-single-digit sales growth, annual operating margin expansion targeting historical levels of profitability,” Boss said.
A recent chat I had with Dickson helps to shed light on Boss’s call. There is more going on here besides me shopping more at Banana Republic Factory, and additional insight on the analyst vibe on Gap can be found via Yahoo Finance’s analyst recommendation tool.
Ahead of Lululemon’s (LULU) earnings on Dec. 5, Citi analyst Paul Lejuez is sticking with a Neutral rating (Hold equivalent) on the stock. But it’s this call out on the stock from Lejuez that caught my eye:
“Short interest currently sits at 6% of the float, above the 4% level three months ago and the highest short interest level in two years. Based on our conversations with investors, sentiment on Lulemon remains negative on the trajectory of Lululemon’s US business, although most expect a sales/EPS beat in 3Q (driven by stronger international sales) and do not see another 2024 EPS guide down this quarter. Most bearish investors believe it will be difficult for Lululemon to grow EPS in 2025.”
Here is more on Lululemon’s short interest and other stats from the Yahoo Finance platform.
Veteran tech analyst Mark Mahaney at Evercore ISI is hiking his price target on Netflix (NFLX) to $950 from $775 per share. Netflix stock currently trades at $886.
Mahaney called Netflix shares a “small buy” and reiterated an Outperform rating.
“At a high level, what our survey results and recent events (e.g., Q3 EPS and the massive success of the Tyson-Paul fight) suggest is that Netflix is in the strongest position financially, fundamentally and competitively that we have ever seen,” Mahaney wrote.
“Its overall streaming leadership — in terms of both market share and content quality — is commanding. And the clearly positive churn intent and price sensitivity results across all three of this quarter’s surveys are material positives for a subscription business. We also see four notable near-term catalysts — Christmas Day NFL games, the 12/26 release of Squid Games II, WWE Raw in January, and pending price increases,” he added.
