Street Calls of the Week By Investing.com

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

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Southern Co .

What happened? On Monday, Mizuho downgraded Southern Company (NYSE: ) to Neutral with a price target of $90.

*TLDR: Mizuho sees limited catalysts for further performance despite a 21% P/E premium. Strong headcount growth and robust capital plan should support SO’s 5-7% EPS growth rate and maintain a strong balance sheet through 2026.

What is the full story? Mizuho downgraded Southern Company to Neutral after previously upgrading it in April 2023 when the stock was trading at a 4% P/E premium to the group. The firm initially said the stock could revalue at a double-digit premium as Vogtle Unit 4 neared completion. However, with shares now trading at a 21% P/E premium for the electric utility group, Mizuho sees few catalysts for further performance.

Despite the marginalization in SO, Mizuho believes that strong load growth in the SO service territory, driven by data center demand and manufacturing relocation, should result in an EPS growth rate of 5-7% of the company to be more sustainable. The firm also believes that management can maintain a solid capital plan, a strong balance sheet with 17% FFO/debt and minimum equity needs of $350 million per year through 2026.

Neutral at Mizuho means “The stock’s total return is expected to be in line with the unweighted and expected total return of the analyst’s industry coverage universe over the next 12 months. “

Shopify

What happened? On Tuesday, Redburn-Atlantic upgraded Shopify (NYSE: ) to Buy with a $99 price target

*TLDR: Redburn-Atlantic highlights Shopify’s innovation, social media integrations and Shop Pay as key growth drivers. The firm forecasts 29% revenue CAGR and 40% EBIT margin through 2026.

What is the full story? Redburn-Atlantic highlights Shopify’s industry-leading innovation, social media integrations, easy-to-use platform and unique Shop Pay button functionality as key factors positioning it to capitalize on structural growth. The company’s extensive ecosystem and platform capabilities have solidified Shopify as the e-commerce provider of choice for merchants of all sizes, with significant enterprise merchant gains anticipated in 2025.

Redburn-Atlantic is updating its Shopify buy recommendation, citing the company’s multi-faceted moat characterized by scale, high switching costs and an impenetrable three-way network. The firm forecasts a net revenue CAGR of 29% from 2023-2026 and an EBIT margin of 40% by 2026, resulting in 24% guidance above the 2026 EBIT consensus. The price target is set at $99, based on earnings of over consensus and a fair multiple, in line with peers in the internet, fintech and software sectors.

Buy Redburn-Atlantic means “Redburn Atlantic claims its share price will rise at least 15% over the course of a year. For high beta stocks, the hurdle rate can be proportionally higher. “

Resmed

What happened? On Wednesday, Wolfe Research downgraded ResMed Inc (NYSE: ) to underperform with a price target of $180.

*TLDR: Wolfe rates RMD Underperform with a $180 target, citing disruption risks from Lilly’s GLP-1 drug. Analysts see 10% upside and 30%-40% downside risk, projecting single-digit growth.

What is the full story? Wolfe analysts rate RMD stock as Underperform with a price target of $180, applying a 20x P/E multiple to NTM EPS of around $9. This lower multiple reflects anticipated risks of disruption to RMD’s business in 2025-2026 due to Lilly’s potential launch of an obstructive sleep apnea indication for its GLP-1 drug, tirzepatide. Wolfe’s total addressable market analysis suggests a long-term impact of 15%-25% on the CPAP opportunity, leading to a more likely sustainable growth rate in the mid-single digits rather than the high single-digits.

Analysts present two sets of comparisons: HSD med tech growers with a P/E of 25x-27.5x and MSD med tech growers with a P/E of 15x-20x. They believe that RMD growth expectations align more closely with the upper end of the MSD range. A medical survey projects a 6% negative impact on CPAP prescription volumes, framing the potential shift from increasing HSD to MSD. Wolfe sees 10% upside potential with 30%-40% downside risk over the next 12-24 months.

Underperform at Wolfe means “The security is expected to underperform in the analysts’ industry coverage universe over the next 12 months.”

DoorDash

What happened? On Thursday, BTIG upgraded DoorDash Inc (NASDAQ: ) to Buy with a $155 price target.

*TLDR: BTIG boosts estimates for DASH due to near-term strength and long-term growth factors. Positive EBIT and expected net income in 2H; the public transport delivery sector shows secular growth.

What is the full story? BTIG has been closely monitoring DoorDash due to a positive category bias, strong execution and upward pressure on estimates. The analyst points to three key reasons for the rise in estimates: continued near-term strength and long-term undervalued factors, important milestones with positive EBIT and net income expected in the second half, and the transit sector being a rare area of ​​secularity. the rise of the consumer-oriented Internet.

The analyst points to a desire to increase exposure to DASH compared to more mature categories such as eTravel, online dating and real estate services. BTIG sees significant potential in DASH’s continued growth and milestones, positioning it as a compelling investment opportunity.

Buy at BTIG means “A security that is expected to produce a positive total return of 15% or more in the 12 months following the recommendation. The BUY rating can be maintained as long as it is considered appropriate, despite price fluctuations that would cause the target to fall outside the 15% return. “

Reddit

What happened? On Friday, B. Riley initiated coverage on Reddit (NYSE: ) at Buy with a $75 price target.

*TLDR: B. Riley sees Reddit’s unique platform and early stage monetization driving growth. Attractive risk/reward profile at 31x 2025 EBITDA with significant leverage potential.

What is the full story? B. Riley highlights Reddit’s unique value proposition for users, advertisers and content licensees through its platform, which supports tens of millions of users in over 100,000 communities. This creates a vast and growing repository of curated content. The broker believes Reddit is in the early stages of monetizing its platform through advertising and data licensing, positioning it for healthy growth and margin gains in the coming years.

At approximately 31x estimated 2025 EBITDA, B. Riley believes the risk/reward profile is attractive, given the growth prospects above the industry and significant leverage over the next few years. The broker sees Reddit’s potential for continued expansion and profitability as a compelling investment opportunity

B. Riley’s Buy means “Overall, we expect ‘Buy’ rated stocks to have an above-average risk-adjusted total return over the next 12 months. We recommend that investors buy the securities at the current valuation.”