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*TLDR: Reddit faces AI-driven user pressure. Growth outlook dims.
What’s the full story? Wells Fargo anticipates Reddit’s user base faces structural challenges as Google (NASDAQ:GOOGL) integrates AI-driven search features, likely pressuring logged-out user engagement and, subsequently, ad revenue. The bank forecasts ad revenue to fall 6% and 14% below consensus in 2026 and 2027, respectively, with EBITDA trailing by 2% and 15%. Logged-out users, accounting for 55% of the total user base but just 15% of ad revenue, remain critical for scale and long-term growth. However, their engagement—20% of logged-in users’ time—is concentrated on low-ad-load comment pages, limiting monetization.
Wells Fargo slashes the three-year logged-in DAU growth outlook to 10% from 13%, citing reduced user acquisition potential. The bank doubts Reddit can meet ad growth expectations on logged-in users alone, as achieving Meta-like monetization appears unrealistic.
Reddit’s high-margin data licensing business, while lucrative, conflicts with community health and ad-based monetization, posing long-term risks. The bank warns of disintermediation as AI-powered search increasingly bypasses Reddit, delivering direct answers sourced from its data. Wells Fargo suggests Reddit prioritize internal monetization of its content and data over licensing revenue, despite forgoing ~$150M in incremental high-margin income.
The bank sees Reddit’s path to a 15% annual return—requiring a 25% revenue CAGR and 15x FY28 EBITDA multiple—as overly ambitious, given the challenges ahead.
Hewlett Packard Enterprises
What happened? On Tuesday, Evercore upgraded HP Inc (NYSE:HPQ) to Outperform with a $22 price target.
*TLDR: HPE upgraded; upside to $30. Multiple catalysts drive value.
What’s the full story? Evercore upgrades Hewlett Packard Enterprise (NYSE:HPE) to Outperform, citing an attractive risk/reward profile with potential upside to $30 and downside support around $15.
The brokerage highlights four key scenarios: 1) The Juniper deal closes, driving double-digit EPS growth and a $23-24 stock price; 2) No Juniper deal but HPE improves margins via cost cuts, potentially reaching $26-31; 3) The Juniper deal fails, leaving HPE rangebound at $15-16; and 4) A sum-of-the-parts analysis suggests $25-30 in value from premium multiples in networking and storage. Evercore sees multiple pathways to upside, particularly for long-term investors.
The brokerage believes HPE’s current valuation offers a compelling entry point, with catalysts including cost synergies, margin improvements, and potential value unlocking. Despite operational challenges and integration risks, Evercore views the stock as poised for meaningful upside, driven by a mix of strategic execution and activism.
The upgrade reflects confidence in HPE’s ability to navigate its near-term hurdles and deliver long-term shareholder value.
UnitedHealth Group
What happened? On Wednesday, HSBC downgraded Unitedhealth Group (NYSE:UNH) to Reduce with a $270 price target.
What’s the full story? HSBC downgrades UnitedHealth Group (UNH), emphasizing risks that disrupt its recovery narrative. The firm identifies three critical concerns: 1) Medical loss ratio (MLR) pressures in 2025, with consensus estimates exceeding prior guidance, potentially spilling into 2026; 2) Underappreciated policy risks for Optum Rx, including PBM reforms and drug pricing models; and 3) A justified lower multiple due to declining ROEs. HSBC argues these risks outweigh the allure of a 30% historical P/E discount.
The firm expects prolonged earnings cuts as new leadership resets expectations and navigates Medicare Advantage complexities for 2026-27. Balancing bids, benefits, and star ratings remains a challenge, while potential Medicaid funding cuts add further pressure. HSBC believes recovery will be delayed, and the stock’s underappreciated risks warrant caution.
Planet Fitness
What happened? On Thursday, Stifel upgraded Planet Fitness Inc (NYSE:PLNT) to Buy with a $120 price target.
What’s the full story? Stifel sees Planet Fitness as a gym empire on the mend, with gross joins stabilizing and a handful of catalysts poised to keep comp sales growing in the mid-to-high single digits.
The analysts argue the company’s marketing has room to sharpen further, while a likely Black Card price hike could juice comps by 3-4%. Efforts to elevate the Black Card Spa’s allure add another layer of optimism.
The wildcard? The “One, Big, Beautiful Bill” in Congress could let gym memberships slide into HSA-eligible expenses, potentially turbocharging membership growth. Stifel bumps up its comp and unit growth estimates, betting on steady member growth and a pricing tailwind stretching years ahead. For now, the barbells are looking up.
Waste Management
What happened? On Friday, JPMorgan upgraded Waste Management Inc (NYSE:WM) to Overweight with a $277 price target.
What’s the full story? JPMorgan upgrades Waste Management (WM) to Overweight, setting a December 2025 price target of $277 based on 16x FY1 EV/EBITDA and a 3% free cash flow yield, roughly 1x above current levels but in line with the broader waste index. The bank notes WM’s valuation has lagged peers, which re-rated 1-5x in the past year, as skepticism persists around the Stericycle (NASDAQ:SRCL) acquisition and renewable natural gas (RNG) project spending.
However, JPMorgan expects WM’s valuation gap to narrow, driven by high single-digit (HSD) revenue and HSD-low double-digit (LDD) EBITDA growth targets over the next five years. Key drivers include cost and revenue synergies from Healthcare Solutions/Stericycle and accelerating sustainability initiatives.
The bank sees potential to lift Stericycle’s core growth from low single digits (LSD) to mid-single digits (MSD) through improved pricing and cross-selling, with Healthcare Solutions’ EBITDA margins reaching the mid-20% range long term. Upside optionality includes future M&A and additional EBITDA accretion from sustainability projects, particularly with favorable RVO announcements.
For investors willing to look past near-term skepticism, WM’s runway for growth appears compelling.
