Pro Recap: Top Wall Street Analyst Takeaways
Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Caterpillar
What happened? On Monday, Morgan Stanley downgraded Caterpillar (NYSE:CAT) to Underweight with a $332 price target.
TLDR: Morgan Stanley sees mounting pressures and potential de-stocking downturn for CAT’s Construction Industries. Analysts predict 2025 EPS 10% below consensus, suggesting negative risk-reward for CAT shares.
What’s the full story? Morgan Stanley analysts highlight challenges for Caterpillar’s Construction Industries segment, noting pressures from declining non-residential construction in the U.S. They see evidence of a de-stocking downturn, with inflated inventories needing correction. Analysts predict 2025 EPS will be 10% below consensus due to these factors, leading to a negative risk-reward scenario while identifying CAT’s valuation as above mid-cycle multiples based on expected peak earnings.
Etsy
What happened? On Tuesday, Goldman Sachs downgraded Etsy (NASDAQ:ETSY) to Sell with a $45 price target.
TLDR: Goldman Sachs issues Sell rating for Etsy due to persistent GMS declines and low growth visibility. Analysts foresee further negative revisions and unfavorable risk/reward despite Etsy’s YTD underperformance.
What’s the full story? Goldman Sachs expressed concerns regarding Etsy, noting prolonged declines in Gross Merchandise Sales (GMS) and poor visibility on growth recovery. The analysts foresee continued market share loss, muted buyer growth, and potential revisions to EBITDA estimates, rendering the risk/reward scenario unfavorable despite Etsy’s 39% YTD underperformance.
Estee Lauder
What happened? On Wednesday, HSBC downgraded Estee Lauder (NYSE:EL) to Hold with a $100 price target.
TLDR: EL’s restructuring affects staff morale and risks losing quality managers. Internal candidates likely to replace CEO Freda; future management should influence restructuring.
What’s the full story? HSBC conveyed concerns about Estee Lauder's restructuring, predicting it would hurt morale and lead to loss of competent managers. They inferred that the company is likely to promote internally for the CEO role, given the challenges of external hiring. The analysts anticipate ongoing influences on operational capacity and company culture amidst restructuring efforts led by internal leaders.
Alcoa
What happened? On Thursday, B. Riley upgraded Alcoa (NYSE:AA) to Buy with a $50 price target.
TLDR: Alcoa’s Q3 adjusted EBITDA of $455M beat estimates; B. Riley upgrades to Buy. B. Riley raises 2025 EBITDA estimate to $2.4B, citing strong cash flow and alumina prices.
What’s the full story? B. Riley upgraded Alcoa after the company reported a strong Q3 adjusted EBITDA of $455 million, surpassing estimates. They attribute this success to effective cost-saving measures and favorable alumina prices. B. Riley revised their 2025 EBITDA forecast upwards, optimistic about Alcoa’s cash flow sustainability and the potential for improved shareholder returns.
Datadog
What happened? On Friday, UBS upgraded Datadog (NASDAQ:DDOG) to Buy with a $150 price target.
TLDR: UBS upgrades Datadog to Buy, citing improved spending and strong cloud growth prospects. UBS expects Datadog’s revenue growth to reach 25-30% in 2025-2026, despite premium valuation.
What’s the full story? UBS upgraded Datadog based on recent signals of improved second-half spending and strong growth in the cloud sector. Analysts predict sustained mid-20% growth for Datadog and potential revenue growth estimates for 2025-2026 to rise to 25-30%. Despite premium valuation metrics, UBS sees growth prospects as outweighing risks.
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