A round up of the top stock calls this week.
[.custom-color]Shopify[.custom-color] was rated as Overweight by KeyBanc. Analyst Justin Patterson set a price target of $80, an implied upside of 33% over its current price. Accrodring to him, Shopify's leading position as an e-commerce platform is likely to benefit from continued expansion into e-commerce by the retail sector. Patterson thinks Shopify's best-of-breed cloud-based solution, which offers retailers a quick way to launch backed by a comprehensive support system, will be key to them hitting a $10 billion run rate in the medium term. He also sees tailwinds for the company from the continued rise of mobile commerce, the potential for international expansion, momentum with offline and B2B clients, and partnerships with companies like SAP and Deloitte.
[.custom-color]Spotify[.custom-color] was upgraded to Buy at Goldman Sachs after overall solid Q2 results. It was given a $425 price target, an implied upside of 32% from its current price. The Q2 results showed revenue increased by 20.2% year-over-year, reaching €3.81 billion, primarily due to a 21% rise in premium revenue and steady growth in ad-supported revenue. Key to the upgrade was Goldman's view that:
"Spotify is the clear global audio platform leader," which could lead to "scaled compounded user growth, rising engagement across multiple format structures, and pricing power."
The company is also beginning to show momentum in its operating margin following a 2023 restructure. Goldman additionally foresees that with increased free cash flow, share buybacks could be a possibility. Goldman certainly seems bullish on the company, commenting that:
We can see a scenario that even our newly raised forecasts might still be too conservative."
[.custom-color]Estee Lauder[.custom-color] was upgraded to Outperform by RBC Capital. Analyst Nik Modi gave the company a $131 price target, an implied upside of 31% over its current price. He believes the current price may have bottomed out, and while he may forecast modest growth, mainly due to slow growth in China, he believes the risk-reward ratio of the company is now favorable. The scope to improve margin is also "very tangible and has additional room to grow."
[.custom-color]Coinbase[.custom-color] was upgraded to Buy at Citi with a price target of $345, an implied upside of 42%. Key to analyst Peter Christiansen's rerating was a changing regulatory environment:
"Shifts in the U.S. Election landscape and the Supreme Court’s overturning of the long-standing Chevron precedent has changed our view on Coinbase’s regulatory risks...We surmise the upside opportunity from a more conducive regulatory environment to be too large to ignore.”
Christiansen also commented that a Trump administration may take a more pro-crypto stance, noting he is due to talk at an upcoming Bitcoin conference.