Moderna upgraded, downgraded Hershey By Investing.com

Investing.com — Here’s a professional recap of the top Wall Street analysts for the past week.

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Petrobras

What happened? On Monday, Morgan Stanley upgraded Petrobras (NYSE: ) to Overweight with a $20 price target.

*TLDR: Morgan Stanley upgraded Petrobras ADRs to Overweight, bullish on recent management returns and strategic continuity. Analysts predict a total return of 60%, including 37% appreciation, regular dividends of 16% and extraordinary distributions of 7%.

What is the full story? Morgan Stanley boosted Petrobras to Overweight from Equalweight, maintaining a positive outlook on the potential for compelling total returns. Despite shares down 17% from their early 2024 peak and experiencing high volatility over the past five months, analysts suggest recent management changes will reduce market noise and, in consequently, to a certain stabilization of stock volatility. Insights from recent conference calls and meetings with the new CEO and CFO reinforced the belief in strategic continuity, emphasizing a balanced approach to increasing investments and dividend distributions, provided that excess cash is available.

Analysts’ base case supports this narrative, anticipating substantial total return potential estimated at 60%. This projection includes 37% share price appreciation, 16% from ordinary dividends and 7% from extraordinary distributions. The reintroduction of the extraordinary dividend appears to be a significant factor in this upbeat outlook, reflecting Morgan Stanley’s confidence in the company’s strategic direction and cash flow management under new management.

Overweight at Morgan Stanley means “total equity return is expected to exceed the total return of the relevant country’s MSCI index on a risk-adjusted basis over the next 12-18 months.”

Hershey

What happened? On Tuesday, Citi downgraded Hershey (NYSE: ) to Sell with a $182 price target.

*TLDR: Citi predicts a difficult year for Hershey’s gross margins in 2025 due to insufficient prices against cocoa inflation. Volume trends and competitive pricing challenges may hamper immediate financial performance despite potential earnings improvement in 2026.

What is the full story? Citi forecasts a difficult year ahead for Hershey’s gross margins, driven by the company’s recent pricing plans for 2025, which may not counter cocoa inflation, particularly in the first half of the year. The investment bank notes that Hershey’s volume trends have been disappointing, in part due to continued declines in distribution across retail channels. Moreover, anticipated price elasticity could pose significant challenges for the company next year, especially if competitors in the chocolate segment do not adopt similar pricing strategies and other snack categories, such as salty snacks, lower their prices.

Investment bank recognizes potential for earnings improvement in 2026; however, it cautions that the baseline from which Hershey’s growth will begin may be lower than expected. This projection stems from existing challenges in offsetting cost inflation and the competitive landscape, which could hamper the company’s immediate financial performance.

Sell ​​to Citi means “Buy (1) ETR of 15% or more or 25% or more for high-risk stocks; and sell (3) for negative ETR.”

Modern

What happened? On Wednesday, HSBC upgraded Moderna (NASDAQ: ) to Neutral with a price target of $62.

*TLDR: HSBC downgraded Moderna’s 2024 revenue guidance due to weaker COVID-19 vaccine sales and competitive pressures on mRESVIA. HSBC upgraded Moderna to Hold, citing significant potential in its cancer vaccine program despite current uncertainties.

What is the full story? HSBC adjusted its expectations for Moderna, noting that the company’s revenue guidance for 2024 was revised downward following weaker-than-expected sales of its COVID-19 vaccine in the second quarter. While Moderna’s second mRNA-based vaccine, mRESVIA, received FDA approval earlier this year, the bank points out that it does not appear to compete effectively with products that were launched earlier in the season. Additionally, updates from the June ACIP meeting on RSV vaccination recommendations for the elderly dampened the market outlook, affirming HSBC’s earlier cautious stance on the company.

Looking ahead, HSBC notes that Moderna’s future prospects are increasingly tied to its cancer vaccine program. Despite ongoing uncertainties surrounding the company’s respiratory vaccine franchise, the bank sees significant potential in the cancer vaccine as a new revenue generator. HSBC maintains its price target on Moderna at $82.00, using an adjusted present value analysis with a weighted average cost of capital of 9.8%, implying a modest upside of 0.4%. All this led the bank to upgrade its rating from Reduce to Hold

Neutral at HSBC means “For a stock to be classified as overweight, the potential return, which is equal to the percentage difference between the current share price and the target price, including the forecast dividend yield, when indicated, had to exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock was expected to exceed its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands have been classified as neutral.”

Take-Two Interactive

What happened? On Thursday, Redburn-Atlantic initiated coverage on Take-Two (NASDAQ: ) at Buy with a PT of $194.

*TLDR: Redburn-Atlantic singles out Take-Two as a top publisher, anticipating that GTA VI will drastically improve financial prospects. I predict GTA VI will increase the stock’s return by 20%, setting a target of $194, trading at 22x estimated EPS.

What is the full story? Redburn-Atlantic highlights Take-Two Interactive as one of the world’s leading video game publishers, owning some of the industry’s most enduring franchises, including Grand Theft Auto, Red Dead Redemption and NBA 2K. With the anticipated release of GTA VI just a year away, the firm predicts that the title will be the best-selling video game of the decade, marking the first new entry in the franchise since 2013. Redburn-Atlantic believes that GTA VI will significantly transform Take . – Two’s financial outlook and suggests that current consensus forecasts have not fully accounted for this impact.

The firm points to the strength of Take-Two’s existing franchises, growing investor excitement ahead of GTA VI’s release and conservative market expectations as factors that could generate substantial stock returns over the next 12 months. With a price target of $194, which represents upside potential of 20%, Redburn-Atlantic says this valuation would require Take-Two to trade at 22 times estimated calendar year 2026 EPS, reflecting a premium of about 10% off the nearest price. equal, Electronic Arts Inc (NASDAQ:).

1-800-Flowers.com Inc.

What happened? On Friday, DA Davidson upgraded 1-800 FLORI.COM Inc (NASDAQ: ) to Neutral with a price target of $7.

*TLDR: DA Davidson upgrades 1-800-Flowers.com to Neutral due to missed expectations for Q4 2024 and lower EBITDA guidance for 2025. Firm cuts price target to $7, citing lowered risk estimates and weak consumer sentiment weighing on sales recovery .

What is the full story? DA Davidson reports that 1-800-Flowers.com ( FLWS ) missed Q4 2024 expectations and provided fiscal 2025 EBITDA guidance of $85 million to $95 million, below consensus of $99.4 million. The respected brokerage notes that given low consumer sentiment, there is a risk that the anticipated return to positive sales growth will be further delayed. However, FLWS confirmed Bloomberg debit card data, indicating that the year-over-year sales decline is likely to be less severe in the first quarter of 2025.

The brokerage believes that current Street estimates have now been adequately de-risked. Due to recent double-digit declines, DA Davidson switched to Neutral. Despite this, the firm is lowering its estimates and price target, lowering its price target to $7 from $8, based on a multiple of 5 times its estimated calendar year 2025 EBITDA of $97 million, which was cut from $106 million USD.

Neutral at DA Davidson means “Expected to produce a total return of -15% to +15% on a risk-adjusted basis over the next 12-18 months.”