How Analysts Size Up Companies

These reports, excerpted and edited by Barron's, were issued recently by investment and research firms. The reports are a sampling of analysts' thinking; they should not be considered the views or recommendations of Barron's. Some of the reports' issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

Walmart -- WMT-NYSE Outperform -- $97.58 on May 28 by Mizuho We hosted Walmart in New York for an investor event including Senior Vice President of Investor Relations Steph Wissink. Walmart does not discuss intraquarter trends. At a high level, we came away much more constructive on the company's ability to navigate the current tariff structure and emerge as an even more dominant everyday-low-price and everyday-low-cost player. Tariff costs are beginning to hit shelves, although Walmart is digesting these very well, in our view, and looking to pass on only a low-single digit percentage price increase to its consumer base. Back-to-school will prove the first real test in this respect, and will make July a crucial month for broader spending. Pressures likely eat into earnings upside versus initial estimated fiscal-year 2025, yet we remain comfortable with the current range.

We continue to view Walmart as a must-own name in consumer with many ways to win. Price target: $105.

Global Payments -- GPN-NYSE Neutral -- $75.55 on May 28 by Seaport Research Partners Global Payments has announced that it plans to divest its Payroll business. The company's ongoing goal is to create a leading pure-play merchant solutions provider, and this sale of its Payroll business is a further step in that direction....We acknowledge there's still a lot left to 2025, but we do see growing potential that a "bull case" eventually can emerge for Global Payments in 2026, based on where the stock is currently trading (less than 10 times earnings per share), and the moves made by Global Payments in recent months with AdvancedMD, Issuer, Worldpay, and now Payroll to better position the company going forward.

Zscaler -- ZS-Nasdaq Buy -- $253.20 on May 28 by BTIC Zscaler has announced its intention to acquire privately held managed-detection-and-response, or MDR, provider Red Canary. Financial terms were not disclosed, and details around the transaction are limited. The deal is expected to close in August 2025. Our view on the deal is mixed. On the positive side, we think it will help Zscaler expand its core security-service-edge offering from its core large-enterprise target market into the mid-enterprise space. Conversely, we think it will be hard to upsell Zscaler's large-enterprise customers on MDR. Zscaler is scheduled to report earnings at market close on May 29. Our estimates are under review. Price target: $252.

Motorola Solutions -- MSI-NYSE Outperform -- $420.44 on May 28 By Evercore ISI Motorola Solutions held a call to discuss its approximately $4.4 billion acquisition of Silvus Technologies, announced on May 27. We think the deal is strategically attractive and should provide Motorola Solutions with new technologies (secured video/data communications without the need for fixed infrastructure) that are complementary to its voice portfolio, a presence in the rapidly growing unmanned market, and attractive growth/accretion dynamics. In addition, the deal gives Motorola Solutions exposure to the "Defense Tech" category -- that should see sustained revenue growth and enable a path for further multiple expansion. In short, Silvus provides Motorola Solutions with new technologies and entry into new markets (unmanned) while accelerating growth and contributing to earnings per share. Price target: $500.

Southwest Gas Holdings -- SWX-NYSE Buy -- $72.40 on May 28 by Siebert Williams Shank On May 22, Southwest Gas Holdings completed a sale of roughly 13.207 million shares of Centuri Holdings through a secondary offering at $17.50 per share for net proceeds to Southwest Gas of approximately $225 million (including the private placement).

With the initial sell-down of Southwest Gas' Centuri ownership interest to just below 66%, the forward fundamental outlook for Southwest Gas has become clearer as the company's exit strategy is now established.

We expect the company to now further and relatively regularly divest portions of its remaining Centuri ownership interest over the next 12 to 18 months, utilizing the proceeds to fund utility capital expenditures and to retire Southwest Gas' parent $550 million term loan....

While reducing the company's stake in Centuri will reduce near-term earnings a bit overall, we expect the reduced parent interest expense to significantly offset the lost Centuri earnings, in our view.

As Southwest Gas nears a pure-play utility and with the retirement of the parent term loan, we expect Southwest Gas shares to benefit from the improved clarity of pure utility earnings in 2027 and an improved credit outlook. Price target: $84.

Portillo's -- PTLO-Nasdaq Buy -- $11.74 on May 27 by Stifel We recently hosted investor meetings with key Portillo's executives and came away more confident in our Buy thesis and believe that Portillo's could be one of the better-performing small-cap restaurant stocks this year. We acknowledge that the first-quarter run-rate sales performance among new units was below expectations. Still, we believe that the issues are addressable, and we expect steady improvement as the year progresses. Price target: $17.

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May 30, 2025 21:30 ET (01:30 GMT)

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