Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
InvestingPro subscribers always get first dibs on market-moving AI analyst comments. Upgrade today!
Alarm.com
What happened? On Monday, JPMorgan initiated coverage on Alarm.com Holdings Inc (NASDAQ:) at Underweight with a $50 price target.
*TLDR: Alarm offers scalable cloud security solutions. JPMorgan rates Alarm Underweight, citing revenue concerns.
What’s the full story? Alarm has developed a robust and scalable cloud-monitoring and management platform, primarily targeting the residential and commercial security sectors according to JPMorgan analysts.
Operating on a B2B2C model, Alarm collaborates with over 12,000 service providers who, in turn, offer security and video-monitoring solutions to more than 9 million subscribers, managing over 150 million connected devices. While the majority of end-users are U.S. homeowners, the company is also focusing on expanding its reach to commercial clients and homeowners abroad.
JPMorgan’s analyst team has assumed coverage of Alarm with an Underweight rating, citing concerns about potential revenue headwinds, limited margin upside, and a relatively higher proportion of hardware and non-recurring revenue streams compared to similarly valued stocks. Additionally, Alarm has been added to the Analyst Focus List as a Short idea, reflecting these concerns.
Underweight at JPMorgan means “over the duration of the price target indicated in this report, we expect this stock will underperform the average total return of the stocks in the Research Analyst’s, or the Research Analyst’s team’s, coverage universe.”
Bristol-Myers Squibb
What happened? On Tuesday, Leerink upgraded Bristol-Myers Squibb Company (NYSE:) to Outperform with a 73 price target.
*TLDR: Leerink expects Cobenfy and milvexian to boost stock performance. BMY’s LT sales projections increased after positive trial outcomes.
What’s the full story? Leerink anticipates upward pressure on consensus expectations for Cobenfy (KarXT) and milvexian, expected to drive stock outperformance. They have adjusted their revenue growth estimates, projecting a 5-year CAGR for 2025-2030 of 1% and an EPS growth of 3%. Their 2030 revenue projections are 33% higher than Visible Alpha’s consensus, and EPS is 57% above consensus.
Despite BMY’s strong stock performance since June 2024, Leerink notes that only 23% of sell-side ratings are Buy/Outperform. Following the failure of Abbvie’s emraclidine trial, the research team increased long-term projections for Cobenfy, including a 36% boost in 2030 sales to $5.7 billion. They see potential for peak Cobenfy sales over $10 billion if the drug succeeds in additional indications.
Leerink also raised milvexian sales projections after a positive trial update, increasing 2030 risk-adjusted sales by 26% to $3.9 billion. They believe milvexian could surpass their 2025 Eliquis sales estimate of $14.4 billion if it demonstrates a superior profile in upcoming trials. While EPS growth is limited through 2029 due to the 2028 loss of exclusivity for Eliquis and Opdivo, BMY’s exposure to these pressures is expected to decrease from 2030 onwards, with a projected 10% EPS CAGR from 2029-2032.
Outperform at Leerink means “We expect this stock to outperform its benchmark over the next 12 months.”
Axalta Coating Systems
What happened? On Wednesday, Evercore initiated coverage on Axalta Coating Systems Ltd (NYSE:) with an Outperform rating and a $47 price target.
*TLDR: AXTA gains momentum with 17% EBITDA growth under new leadership. Evercore sees potential for 11x EBITDA, suggesting a 17% upside.
What’s the full story? Evercore highlights that Axalta Coating Systems, a leading figure in Refinish and Mobility coatings since its 2013 spin-off from DuPont (NYSE:) Performance Coatings, has faced challenges but is now gaining momentum under new leadership. Chris Villavarayan, appointed CEO in November 2022, has revitalized the company with strategic self-improvement initiatives, fostering a significant rebound in both commercial performance and stock momentum. AXTA’s significant EBITDA growth of 17% year-over-year in 2023, with a similar forecast for 2024, indicates a promising trajectory of value creation through both organic and inorganic growth.
Despite the improved business fundamentals and reduced volatility, AXTA’s market multiple has not increased, trading at a 9.8x next twelve months EBITDA valuation. This is approximately a 2-turn discount compared to refinish/industrial coatings competitor PPG (WA:), and more than 3 turns below other materials and industrial peers with similar profiles. Evercore suggests that although timing and catalysts pose challenges for valuation re-rating stories, consistent operational execution by the new management and the success of the formal A-Plan could initiate gradual multiple expansion.
The brokerage believes there is potential for AXTA’s multiple to increase. Just a 1-turn expansion to 11x the projected 2025 EBITDA of $1.2 billion could support a price target of $47 per share, implying a 17% upside.
Outperform at Evercore means “the total forecasted return is expected to be greater than the expected total return of the analyst’s coverage sector.”
Plug Power
What happened? On Thursday, BTIG downgraded Plug Power (NASDAQ:) to Neutral without a price target.
*TLDR: Plug Power aims to extend liquidity amid slower hydrogen growth. BTIG highlights cost cuts and sales as margin improvement keys.
What’s the full story? BTIG reports that Plug Power is actively working to extend its liquidity, anticipating a slower-than-expected ramp-up in hydrogen order momentum. Despite growing global hydrogen demand, the company’s 2025 revenue guidance of $850M-$950M is approximately 20% below the consensus. PLUG has revised its margin targets, now aiming for positive gross margins by the end of 2025 and positive EBITDA margins in the second half of 2026, reflecting the need for increased product sales to improve margins.
The analysts cut PLUG to Neutral due to the slower-than-expected demand impacting margin improvement. To address liquidity concerns, PLUG has raised approximately $877 million in equity year-to-date, increased its ATM to around $1 billion, and recently issued a $200 million convertible note. This financial maneuvering aids near-term liquidity, allowing management to concentrate on securing DOE funding to restart its Texas hydrogen production facility and reduce costs to achieve positive gross margins by late 2025.
BTIG emphasizes that while PLUG’s product is well-positioned for the global hydrogen buildout, cost reduction and increased sales are crucial for achieving the company’s revised financial targets. Management remains hopeful about receiving funding early next year to advance its strategic initiatives. The focus is now on cost management to support these goals amid industry growth challenges.
Neutral at BTIG means “A security which is not expected to appreciate or depreciate meaningfully over the next 12 months.”
SolarEdge
What happened? On Friday, Morgan Stanley downgraded SolarEdge Technologies Inc (NASDAQ:) to Underweight with a $9 price target.
*TLDR: Morgan Stanley foresees SEDG facing profitability challenges from low demand. Price target is cut to $9, a 30% downside.
What’s the full story? Morgan Stanley anticipates a protracted return to profitability for SEDG due to declining demand in Europe and intense pricing competition from low-cost Chinese manufacturers. These factors threaten SEDG’s ability to regain strong margins and sustainable cash generation. Additionally, the upcoming debt maturity in September 2025 poses a significant liquidity risk if not managed effectively.
The analysts highlight a continuous decline in demand and earnings outlook, with a notable lack of visibility in SEDG’s core markets increasing the risk to its cash flow. Reflecting this persistent demand weakness, particularly in Europe, Morgan Stanley has adjusted its 2026 EBITDA estimate down by 70%.
As a result, Morgan Stanley lowered its price target for SEDG to $9, representing a 30% downside. This new target implies a valuation of 0.4 times the 2026 revenue estimate or 39.2 times the 2026 EBITDA estimate, compared to the previous target of 0.7 times and 28.5 times, respectively.
Underweight at Morgan Stanley means “The stock’s total return is expected to be below the average total return of the analyst’s industry (or industry team’s) coverage universe, on a risk-adjusted basis, over the next 12-18 months.“
