Analysts are intrested in these 5 stocks: ( (CVNA) ), ( (RIVN) ), ( (STLA) ), ( (LUV) ) and ( (STZ) ). Here is a breakdown of their recent ratings and the rationale behind them.
Carvana Co. is catching the attention of investors as analyst Alexander Potter from Piper Sandler & Co. upgrades the stock to a ‘Buy’ with a price target of $225. Despite macroeconomic uncertainties, Carvana’s innovative online business model for selling used cars is seen as a strong growth driver. The company has emerged from financial difficulties with a solid cost structure, and analysts believe it can capture a significant share of the used car market. The potential for Carvana to sell over 3 million units annually and achieve a low-teens EBITDA margin makes it an attractive opportunity, with a current trading price suggesting a 28% upside.
Rivian Automotive, on the other hand, has been downgraded to ‘Hold’ by the same analyst, with a new price target of $13. While Rivian’s strategy of self-reliance in electronics and software is commendable, the lack of immediate catalysts for growth in 2025 is a concern. The company faces several policy risks, including potential changes to EV tax credits and regulatory challenges. Despite these hurdles, Rivian’s joint venture with VW and cost reductions are positive signs, but investors are advised to be cautious in the short term.
Stellantis has also been downgraded to ‘Hold’ due to uncertainties surrounding its future performance. The automaker’s ambitious operating margins have not materialized as expected, and the lack of a CEO adds to the challenges. While product launches may stabilize market share, the high cost of U.S. EVs and potential margin dilution in Europe are concerns. The new price target of $13 reflects a more conservative outlook, with the company needing to address its operational issues over the coming years.
Southwest Airlines is seeing a shift in sentiment as analysts upgrade the stock to ‘Hold,’ with price targets of $36 and $34 from UBS and Melius Research, respectively. The airline’s aggressive revenue and cost initiatives, such as charging for bags and introducing basic economy, are expected to improve financial performance. However, the weaker cyclical backdrop in the airline industry may limit upside potential. Despite these challenges, Southwest’s self-help initiatives and cost management efforts are beginning to resonate with investors, suggesting a more balanced risk-reward profile.
Constellation Brands faces a downgrade to ‘Hold’ due to external headwinds impacting its beer business. Analyst Filippo Falorni from Citi Research highlights the slowdown in beer sales, particularly among Hispanic consumers, as a key concern. The company’s historical growth rates are under pressure, and looming tariff risks further complicate the outlook. With a reduced price target of $200, investors are advised to be cautious as the company navigates these challenges. Despite a depressed valuation, the lack of near-term catalysts suggests limited upside potential.