How Analysts Size Up Companies
Buy -- $18.29 on July 7
by UBS
Large regional banks as a group have materially lagged behind their money center peers since Liberation Day, with the group up 12% since tariffs were announced, versus money center peers up 21% and the KBW Nasdaq Bank Index up 17%. With worst-case scenarios on the economy from tariff policy off the table for now, we think regionals are ripe for a catch-up -- and we upgrade KEY to Buy [from Neutral] as we think it will be an outsize beneficiary of this bounce.
With a superior capital arsenal, strong loan growth momentum, exposure to a potential second-half capital markets recovery -- plus the potential for net interest income upside surprises -- we think KEY is poised for earnings-per-share upgrades and multiple expansion, particularly on tangible book value. We increase our 2025 estimate very modestly to $1.40 (was $1.39) and our '26E by 4% to $1.76 (was $1.70). Our target P/E multiple moves to 13 times from 11 times prior, driving our price target to $22.
Chime Financial -- CHYM-Nasdaq
Overweight -- $31.32 on July 3
Initiating coverage with an Overweight with a $39 price target. Chime's proven ability to win primary account status while driving consistent customer growth, generate strong uptake on relevant new financial products, and maintain high incremental margin gives us confidence that the company can execute against a sizeable demographic opportunity in the U.S., with likely greater success than other fintechs.
Over the past six weeks, we've become more comfortable with the pace of US consumer spending growth, with most indications (banks, government data), generally showing that consumer card spending growth, including for Chime's key under-$100K income customer, has been better than most had
expected. Given that backdrop, and with the potential for our forecasts of new users and services growth to prove conservative, we are optimistic about Chime's ability to maintain fast revenue growth and fairly consistent margin expansion, which we believe makes it an attractive opportunity.
XPO -- XPO-NYSE
Outperform -- $129.70 on July 7
by Oppenheimer
We're reiterating our Outperform rating and increasing our target to $150 from $126 heading into XPO's 2Q25 results release [slated for July 31]. Despite challenging macroeconomic headwinds, we expect XPO [a provider of freight transportation services] to deliver adjusted operating ratio improvement year over year in the second quarter of 2025 and for the full year 2025. This implies outperformance within the North American less-than-truckload industry, as consensus expectations for the adjusted operating ratios of XPO's closest peers is for deterioration year over year this year.
XPO's anticipated outperformance is being fueled by idiosyncratic factors, such as significant pricing improvement, due primarily to enhanced customer service, as well as operational efficiency initiatives such as line-haul insourcing and labor productivity. We view XPO as undervalued, and anticipate the company's multiple expands as XPO continues to deliver adjusted operating ratio outperformance.
Six Flags Entertainment -- FUN-NYSE
Buy -- $31.07 on July 8
by Guggenheim
We have updated our 2Q FUN forecast to reflect weather headwinds
across the company's portfolio throughout a significant portion of the quarter. Management noted weather challenges in April on the 1Q call, and the weather headwinds continued into May and early June (including the important Memorial Day time-frame which likely impacted the velocity of season pass sales). Given the weather, we have lowered our 2Q revenue (now $1.045 billion versus $1.072 billion prior, and Ebitda (now $383 million versus $408 million prior). Weather outcomes in July (and 3Q overall) will be key to hitting management's Ebitda guide for the year.
We are maintaining our Buy rating and lowering our price target to $48 (down from $50 on our lower Ebitda outlook).
Vital Farms -- VITL-Nasdaq
Buy -- $38.30 on July 7
by Mizuho Securities
We initiate coverage of Vital Farms with an Outperform rating and $45 price target. The leader in U.S. pasture-raised eggs, we view VITL as strongly positioned for the structural growth of protein consumption and premiumization of the eggs category. Concerns for animal welfare are driving conversion of U.S. eggs to cage-free varieties, but only pasture-raised eggs ensure a natural habitat for hens. In contrast with plant-based food and beverage, which require consumers to modify consumption to do better for the planet, the only sacrifice required by pasture-raised eggs is a price premium that our survey suggests many consumers are willing to pay. Industry studies also indicate superior nutritional content.
Our $45 price target is based on 17x our estimated calendar 2026 Ebitda; a discount of 10% versus staples growth peers. We see upside potential to Ebitda through 2027 from farm additions and operating leverage.
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(END) Dow Jones Newswires
July 11, 2025 21:31 ET (01:31 GMT)
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