Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Netflix
What happened? On Monday, MoffettNathanson upgraded Netflix Inc (NASDAQ:NFLX) to Buy with a $1,100 price target.
*TLDR: Netflix’s flywheel drives growth; ads unlock margins. Expansion continues, defying limits.
What’s the full story? MoffettNathanson raises its estimates with heightened confidence in Netflix’s margin expansion story. The firm’s updated valuation approach captures this growth using a 29.5x 2027E P/E multiple, implying a PEG ratio of 1.25—still below the S&P 500’s. Netflix has decisively won the streaming wars. The question now is how much growth remains. The Netflix flywheel is in full effect: more subscribers allow greater content spending, driving better engagement, which fuels further subscriber growth and pricing power. This virtuous cycle underscores the enduring advantage of Netflix’s first-mover status.
The firm highlights Netflix’s proven ability to pull multiple levers for incremental revenue growth, translating into stronger profits and free cash flow. Now, Netflix stands at a unique juncture as it scales advertising, unlocking a new growth runway. Despite past concerns about subscriber growth being pulled forward, the introduction of the ad-supported tier effectively acts as a price cut in high-cost markets, expanding the total addressable market. This tier attracts both budget-conscious existing subscribers and new ones, creating a dual revenue stream through subscriptions and ads. Looking ahead, MoffettNathanson believes the ad-tier’s success will drive margins higher, with no ceiling in sight.
Ralph Lauren
What happened? On Tuesday, Goldman Sachs upgraded Ralph Lauren Corp (NYSE:RL) (BVMF:R1LC34) to Buy with a $286 price target.
*TLDR: Goldman backs Ralph Lauren’s strategy for growth. Limited risks and strong execution drive earnings.
What’s the full story? Goldman highlights RL’s brand elevation strategy as a catalyst for market share gains and margin expansion. The bank emphasizes RL’s broad geographic and category growth potential, particularly in high-margin segments and core markets, as key drivers of earnings visibility. RL’s limited exposure to near-term macroeconomic risks—such as tariffs, department store declines, and pressure on lower-income consumers—further strengthens its outlook.
Recent quarters have bolstered the bull case, with accelerating comparable sales growth, stabilized North American wholesale channels, and average unit retail expansion driven by reduced discounting and product mix shifts. While investor optimism is already high, Goldman believes RL’s execution of strategic initiatives will sustain earnings growth momentum.
The bank remains confident in RL’s ability to capitalize on its positioning and deliver robust financial performance moving forward.
Tesla
What happened? On Wednesday, Cantor Fitzgerald upgraded Tesla Inc (NASDAQ:TSLA) to Overweight with a $425 price target.
*TLDR: Cantor upgrades Tesla, citing growth catalysts. Long-term potential outweighs near-term risks.
What’s the full story? Cantor upgrades Tesla to Overweight following a visit to its Austin Gigafactory and Cortex AI data centers, reaffirming a $425 12-month price target. The broker sees Tesla’s recent 45% year-to-date share decline as a compelling entry point for long-term investors, driven by upcoming catalysts. These include the June 2025 launch of the Robotaxi segment, global Full Self-Driving (FSD) rollouts in China and Europe, and the introduction of a $30,000 lower-priced vehicle in the first half of 2025. Further, Tesla’s Optimus Bot, expected to begin high-volume production in 2026, and the Semi Truck’s launch in late 2025 or 2026 add to the growth narrative.
Despite a muted first quarter due to European demand softness, heightened Chinese competition, and Elon Musk’s polarizing politics, Cantor remains optimistic. Tesla’s automotive business is expected to return to growth in 2025, with Energy Storage and Deployments projected to surge over 50%. However, tariffs and potential EV tax credit removals could temper automotive growth. The broker highlights Tesla’s exposure to China (21% of FY24 revenue) and other regions (30%) as both a risk and opportunity. Ultimately, Cantor sees long-term upside from FSD, Robotaxi, Energy Storage, and Optimus Bots as central to Tesla’s investment case.
Southwest Airlines (NYSE:LUV)
What happened? On Thursday, UBS upgraded Southwest Airlines Co (BVMF:S1OU34) to Buy with a $36 price target.
*TLDR: UBS upgrades LUV, citing bold profit moves. Bag fees, layoffs to boost margins.
What’s the full story? UBS upgrades LUV citing the airline’s assertive steps to bolster financial performance despite a challenging cyclical environment. The bank highlights LUV’s recent decision to charge for checked bags—a "whatever it takes" move signaling a sharper focus on profitability. While execution risks remain, UBS believes these aggressive revenue and cost initiatives are poised to improve margins and drive EPS growth.
The bank raises its 2025 EPS forecast to $1.68 (from $1.54) and 2026 EPS to $2.55 (from $2.10), with a price target increase to $36 (from $29). Current market pricing reflects ~$2.40 in EPS for FY’26, suggesting room for upside.
LUV’s shift away from free bags could generate $275 million to $1.1 billion in annual revenue, depending on passenger behavior. Additionally, the introduction of basic economy signals a more aggressive segmentation strategy, which UBS estimates could unlock $900 million to $1.6 billion in incremental revenue through upselling extra legroom seats. On the cost side, LUV’s decision to lay off 2,200 employees—translating to $300 million in annual savings—underscores its commitment to margin improvement.
Collectively, these measures position LUV for stronger financial footing, even as the broader airline sector faces headwinds.
Super Micro Computer
What happened? On Friday, JPMorgan upgraded Super Micro Computer Inc (NASDAQ:SMCI) to Neutral with a $45 price target.
*TLDR: JPM less cautious on Super Micro amid server demand surge. Revenue gains may face margin pressures ahead.
What’s the full story? JPM upgrades Super Micro citing the company’s progress past SEC-related uncertainties and its positioning to benefit from surging demand for Blackwell-based servers, which command higher average selling prices.
The tier 1 bank notes that accelerated supply from Nvidia (NASDAQ:NVDA) bolsters near-term revenue forecasts, yet cautions that intensifying competition could pressure gross margins. Elevated expenses tied to internal control improvements and aggressive pricing dynamics further cloud the margin outlook.
While JPM raises its 12-month revenue projections, it anticipates gross and operating margin moderation in FY26, likely capping earnings-per-share growth despite robust revenue gains. The analyst team lifts its December 2025 price target to $45, applying a 10x earnings multiple—up from 9x—but maintains a discount to Dell’s 11x multiple. This reflects Super Micro’s challenges, including lingering audit and filing concerns, a pending CFO transition, and unresolved DOJ investigations.
These factors, JPM argues, will likely weigh on valuation until fully resolved.
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