Dollar Tree scoring 'sticky new customers,' per Goldman: 5 big analyst picks
Investing.com -- Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades for DollarTree, ViaSat and Progressive, and buy initiations for Amazon and Microsoft.
InvestingPro subscribers got this news first. Never miss another market-moving headline.
Dollar Tree gets a Goldman buy call
Dollar Tree (NASDAQ:DLTR) shares were on the rise before Tuesday's opening bell after Goldman Sachs upgraded the discount chain to Buy from Neutral, upping the price target by $13.00 to $137.00, as reported in real time on InvestingPro.
The analysts highlighted the stock's significant historical discount at the moment, with a forward price-to-earnings ratio of 15.9x, and say they see "strong earnings growth potential" at the company, supported by a number of factors.
In particular, they believe Dollar Tree stands to reap "continued market share gains from improving traffic trends with sticky new customers, an improving discretionary cash flow outlook for lower and middle income consumers in 2024, and better shopability/in-stocks after recent investments."
They also believe "lower freight costs" should propel the company forward for the second half of this year, and believe that the company's "multi-year turnaround efforts" are poised to power at least a 19% compound annual growth rate (CAGR) for earnings per share through fiscal 2026, "well above most broadline/dollar store peers."
Shares were up 2.2% to $112.50 in the premarket.
Amazon started with Buy at Stifel
Stifel initiated coverage on Amazon.com (NASDAQ:AMZN) late Monday with a Buy rating and a price target of $173.00.
The analysts emphasized Amazon's unmatched e-commerce scale, highlighting its diverse product range, expansive fulfillment network, and extensive resources for third-party sellers.
Stifel believes the company's vast scale is not only pivotal for its primary retail sector, but also underpins ventures such as Prime, Advertising, AWS, subscriptions, and hardware, with big future potential seen in its fledgling Amazon Business and healthcare units.
Key near-term prospects, say the analysts, include a stabilized trend in cloud spending benefiting AWS, improved operating margins following the optimization of its increased fulfillment footprint during the pandemic, and anticipated growth in advertising with the introduction of ads in Prime Video in 2024.
Amazon shares were recently dipping in the premarket, off 0.8% to $131.43.
Microsoft initiated at Buy: 'GenAI, cloud and security to drive accelerating growth'
Loop Capital initiated coverage on Microsoft (NASDAQ:MSFT) with a Buy rating and a price target of $425.00.
The analysts see Microsoft's growth propelled by cloud-computing product Azure and generative artificial intelligence (GenAI) offerings like M365 Copilot, and believe the company is well positioned to benefit from GenAI-focused enterprises and independent software vendors alike.
They added that their checks "indicate that the cloud cost optimization efforts have started to wane, which should provide a tailwind to Azure's business going forward."
Regarding M365 Copilot - an AI assistant for Microsoft's suite of M365 business products, including Word, Excel and PowerPoint - the analysts believe the medium-to-long-term market opportunity "is undeniable, especially as a top GenAI application vendor and as one of the top two cloud service providers (CSPs)."
Shares were ticking down fractionally in the premarket to $331.90.
ViaSat upped to Overweight at JPMorgan
ViaSat (NASDAQ:VSAT) shares were up nearly 5% premarket Tuesday after JPMorgan upgraded the purveyor of high-speed internet and secure networking systems to Overweight from Neutral with a price target of $30.00 (from $35.00).
ViaSat, which sells these services to the military and commercial markets, recently decided not to replace its VS-3 F1 satellite and to add its next two Viasat-3 generation satellites - and the analysts believe that strategy, alongside existing infrastructure and agreements, should support the company's growth plans.
Progressive raised to Neutral from Sell at Citi
Citi upgraded Progressive (NYSE:PGR) to Neutral from Sell and raised its price target to $158.00 from $120.00.
Citi analysts wrote that Progressive's Q3 results last week were unexpectedly positive after a roller coaster year for the insurance outfit, which they said had cast doubt on the company's ability to handle uncertainties such as inflation/supply chain and loss costs.
Citi now anticipates Progressive has potential to improve margins in personal auto insurance, writing, “Combined with PGR’s 3Q beat and improving reserve development, we believe these create the risk that it reengages growth and thus see potential upside/downside as more balanced from here."
Shares were rising 1.6% to $159.50 in the premarket.
In fast-moving markets, every second counts - and InvestingPro subscribers are always one step ahead with lightning-quick updates.
Related Articles
Dollar Tree scoring 'sticky new customers,' per Goldman: 5 big analyst picks
Boeing price target cut at BofA on supplier concerns
Amazon to launch online shopping service in South Africa in 2024
