Investing.com — This is your Pro Recap of the top Wall Street analyst takeaways from the past week.
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Instacart
What happened? On Monday, Needham upgraded Instacart ( Maple Bear Inc.) (NASDAQ: ) to buy, adding to the condemn list with a price target of $56.
*TLDR: Needham is optimistic about CART’s strong earnings in 2024 and customer experience. They predict significant GTV growth and a compelling risk-reward profile.
What is the whole story? Analysts at Needham believe CART’s stronger-than-expected earnings in 2024 suggest that fears about competition and a pull-forward (TAM) are likely overblown. They attribute this to CART’s superior customer experience in the grocery sector, which continues to improve. Needham’s cohort analysis shows that the COVID cohorts are stable, and the addition of large post-Covid cohorts drives growth in consolidated gross transaction volume (GTV).
Based on this, Needham’s bullish forecast suggests that CART can achieve low GTV growth over the next two years, leading to a 30% adjusted annual EBITDA growth rate (CAGR). They find the risk-reward profile of CART stock compelling, with a $80 valuation and a floor supported by potential merger and acquisition (M&A) opportunities.
Advanced micro devices
What happened? On Tuesday, Loop Capital initiated coverage on Advanced Micro Devices Inc (NASDAQ: ) at Buy with a price target of $175.
*TLDR: AMD stock underperforms, trades below SOX. Analysts of Loop Capital emphasize accelerated computer success.
What is the whole story? Loop notes that AMD stock has underperformed the SOX index in 2024, falling approximately 18% compared to the SOX’s 19% gain. AMD stock currently trades at 24.0x NTM non-GAAP EPS, well below SOX at 29.0x. Analysts note that AMD shares have aligned more with rivals with exposure to mature end markets such as the PC, smartphone and industrial sectors.
According to Loop, AMD’s stock should better reflect its success in accelerated computing, including GPU-based data center computing and XPUs, as well as unique opportunities to expand market share in the PC and server markets. Analysts point out that these opportunities have gained importance recently due to the ongoing challenges facing Intel (NASDAQ: ).
Shyft Group
What happened? On Wednesday, DA Davidson upgraded Shyft Group Inc (NASDAQ: ) to Buy with a price target of $15.
*TLDR: Davidson upgrades SHYF after meetings with investors. CEO Barend Fruithof highlights the benefits of the deal.
What is the whole story? Davidson upgraded SHYF after meetings with the company’s future CEO and investors. The company expresses confidence in the strategic and financial aspects of the Aebi Schmidt deal, further bolstered by the stock’s ~30% decline since last month’s downgrade, which represents an attractive entry point.
Conversations with future CEO Barend Fruithof highlight strong customer enthusiasm for the business. Additional details on synergies and long-term prospects enhance the company’s positive outlook, shifting the balance of risk and reward in favor of investors.
Advanced micro devices
What happened? On Thursday, Wolfe Research downgraded AMD to Peer Perform
*TLDR: Wolfe Research Sees AMD Data Center GPU Underperformance. CY25 forecast reduced from $10 billion to $7 billion.
What is the whole story? Wolfe Research initially noted that AMD’s data center GPU business was underperforming, leading to a cut in their CY25 forecast from over $10 billion to $7 billion. The brokerage doubts that AMD will offer 25 CY guidance during their 4Q call. After a recent visit to Asia, Wolfe Research predicts that AMD will face challenges in its upcoming earnings. Original design manufacturer (ODM) plans show only modest growth from 4Q24 numbers, forecasting data center GPU revenue between $1.5-2.0 billion for 4Q14 and $7 billion for 2015. quarter, which is below previous estimates.
For 1Q25, Wolfe Research models $1.75 billion in data center GPU revenue, with steady growth expected through the end of the year. They predict sluggish PC seasonality after a strong 4Q (clients down 17% q/q in 1Q), continued gaming weakness (-20% q/q) and no built-in recovery until 2H25 However, Wolfe Research expects that the MI350 series will be a significant catalyst for AMD in 2H25, with optimism extending into CY26. The MI350 is expected to be a more significant redesign than the MI325, primarily improving the memory load.
Cloudflare
What happened? On Friday, Citi upgraded Cloudflare Inc (NYSE: ) to buy with a price target of $145.
*TLDR: Citi’s bullish view linked to expected growth.
What is the whole story? Citi rates Cloudflare a Buy citing the significant evolution of NET over the past five years. The bank notes that NET’s expansion has gone beyond its core competencies of content caching, web performance and infrastructure protection, now offering fast, reliable and secure internet connectivity through its own Cloud spanning 100 countries and 250 cities. This growth is in its early stages, and Citi is optimistic about the role of NET in AI development, particularly as AI training transitions to AI inference. A partnership with Apple (NASDAQ: ) and a strengthened executive team boost NET’s prospects.
Citi believes that recent changes in NET’s go-to-market strategies have stabilized, setting the stage for significant growth. With increased sales productivity and expected revenue growth of 27-30%, Citi sees NET as a clear path toward reaching approximately $5 billion in revenue by CY2028.
The bank highlights the potential for profitable growth with increasing free cash flow margins, underpinning a strong financial outlook.
