The S&P 500 index touched an all-time high this week as Mark Zuckerberg’s company’s 20-day streak finally came to an end, adding $320 billion to the company’s market cap. The semiconductor stocks once again drove the broader market. However, as the rally cools down, the focus is shifting back to Donald Trump’s tariffs. Automobiles, pharmaceuticals, and semiconductor companies are expected to be hit in the next wave of tariffs which has forced investors to rethink their strategies.
As investors and analysts try to figure out where the market is headed, some companies are more likely to go up in share price than others. We looked through the recent analyst upgrades and shortlisted 10 companies that are likely to go up according to analysts. We also looked at the factors driving this analyst optimism.
To come up with the list of 10 stocks that analysts think will go up, we only considered stocks with a market cap of at least $1 billion that were upgraded this week.
10. Altice USA, Inc. (NYSE:ATUS)
Altice USA, Inc. (NYSE:ATUS) is a video and broadband communications services provider under the Optimum brand name. The company offers telephony, broadband, video, and mobile services to business and residential customers. The stock was upgraded from Market Perform to Outperform with a price target of $3.5, mainly due to the management’s strategic stance.
The company’s management is making some organizational changes that will help it improve customer care and reach more low-income customers. It is expected that the company will be able to slow down subscriber losses and return to growth:
We believe the visibility on those changes, along with new initiatives this year, can show tangible results in the next 18 months.
The stock is already up 19% this year so far, despite an earnings miss just a week ago. The company reported an EPS of -$0.12, missing the analyst estimates by $0.16. Notably, the news and advertising revenue grew 23% YoY in the fourth quarter.
9. CNX Resources Corporation (NYSE:CNX)
CNX Resources Corporation (NYSE:CNX) operates as an independent natural gas and midstream company that acquires, develops, produces, and explores natural gas properties. It operates through Coalbed Methane (CBM) and Shale segments. The company produces and supplies pipeline-quality natural gas mainly to wholesalers. Raymond James analysts upgraded the company from Underperform to Market Perform.
The analysts expect that the company will benefit from the positive industry trend, considering its optimistic natural gas outlook. Their main concern with CNX is that its hedging approach may limit its upside potential in an improving natural gas market. However, he believes that the company will still reap benefits from the industry-wide growth if its strong natural gas outlook turns out to be true.
Though the company may show slower growth than its market competitors having greater exposure to natural gas, the analysts have upgraded the rating of the stock. They anticipate the company to perform in line with the overall market, supported by growing cash flows due to increasing natural gas prices.
8. Parsons Corporation (NYSE:PSN)
Parsons Corporation (NYSE:PSN) is an integrated services and solutions provider to the intelligence, defense, and critical infrastructure markets. It operates in two segments; Critical Infrastructure and Federal Solutions. The stock has lost a quarter of its value in the last month alone after analysts feared the company may lose some of its lucrative federal contracts after the inauguration of Donald Trump. It was subsequently downgraded from Outperform to Market Perform by William Blair.
Less than a month on, the same firm has now changed its opinion of the company. The reason is quite simple: the stock has already fallen enough to factor in the loss in revenue from the executive orders that were feared to hit the company’s topline. With that risk already factored in, the stock’s fundamentals should help it reverse the price trend, which currently hovers near its 52-week lows.
The company recently acquired the TRS Group for a $36 million all-cash deal. This acquisition of a firm specializing in environmental remediation capabilities should boost the company’s Federal Solutions and Critical Infrastructure segments.
7. Bath & Body Works, Inc. (NYSE:BBWI)
Bath & Body Works, Inc. (NYSE:BBWI) is a specialty retailer of body care, home fragrances, and soap & sanitizer products. The company distributes its products under the White Barn, Bath & Body Works, and other brands. It sells its products through e-commerce sites and retail stores. The company’s shares surged as it was upgraded recently by J.P. Morgan from Neutral to Overweight.
This upgrade was due to the company’s steady revenue growth and the upside for accelerating growth opportunities through collaboration with Disney and other strategic expansions. After this upgrade, the company seems to be well-positioned for a potential turnaround in revenue and profitability. Bath & Body Works’ collaboration with Disney is projected to maintain sales momentum after the holiday season.
Moreover, this collaboration highlights the company’s largest partnership so far which provides a diverse portfolio of products at a wide price range, including a high-value option at $99.95. This indicates the highest price point, exceeding the previous collaborations’ high price of $79.95.
On the timing of the [Disney] launch, we note a favorable year-over-year comparison on same-store-sales in the month of February, as management on the Q1 2024 earnings call cited ‘at the beginning of the quarter, we leverage promotion to help drive traffic, in light of a floor set that wasn’t resonating with our customers.
6. W.P. Carey Inc. (NYSE:WPC)
W.P. Carey Inc. (NYSE:WPC) is one of the largest net lease REITs which holds a wide-ranging portfolio of operationally critical and high-quality commercial real estate. The company’s portfolio consists of 1,430 net lease properties that cover about 172 million square feet of area. BMO Capital increased the price target of the stock from $60 to $67.
The upgrade comes amid improving growth prospects as well as a favorable cost of capital. The Adjusted Funds From Operations (AFFO), a metric that measures the funds from operations minus the cost incurred on maintaining the properties, is back in growth mode with a 3.6% increase expected in 2025. The analysts made the following comment in their upgrade note:
After two years of declining earnings driven by office dispositions, WPC is back to delivering AFFOps growth, with 2025 guidance midpoint of $4.87 (+3.6% y/y), above consensus.
The company also has a favorable incremental cost of capital which should help it raise more money to spur growth, if needed.
5. Tapestry, Inc. (NYSE:TPR)
Tapestry, Inc. (NYSE:TPR) is a branded lifestyle products and luxury accessories provider. It operates through Stuart Weitzman, Coach, and Kate Spade segments. The company provides women’s accessories, women’s handbags, belts, charms, and key rings. It also offers men’s products including bag collections, small leather goods, eyewear and sunglasses, and footwear & fragrances.
The holiday season saw the company’s Coach brand register impressive growth, helping the company improve its standing in the premium accessories business. Analysts at Redburn Atlantic believe the company is going under the radar and has the potential for outperformance:
We believe consensus is underestimating the incremental growth and margin expansion prospects for the core Coach brand, given its already lofty margins (30%+) and seemingly mature position in the key markets of the US and China.
The company spent much of 2024 dealing with regulatory issues related to the merger with Capri (CPRI). The merger plans were abandoned late last year when both parties mutually agreed that the required regulatory approvals would not be received in time. By shifting the focus back to the business for the holiday season, the company has managed to accelerate its growth.
The analysts echoed the same sentiments, expecting the company to grow its earnings at 14.5% CAGR till FY28 as opposed to the 5% growth modeled with the merger.
4. Edison International (NYSE:EIX)
Edison International (NYSE:EIX) is an electric power generator and distributor. It provides and delivers electricity to public authorities, commercial, residential, agricultural, industrial, and other sectors. It is one of the oldest utility companies in the country, founded in 1886. It was upgraded from Neutral to Buy at UBS, though the price target was subsequently lowered to $65 from $69, still a 27% upside.
A stock that was registering all-time highs just two months ago has now dropped to COVID-19 levels due to the LA wildfires that wreaked havoc in the region. The company has been facing multiple lawsuits, both from citizens residing in the region as well as shareholders. However, according to the analysts, the worst-case scenarios for these lawsuits are already priced in. The company may be held liable for $3.9 billion in damages. Once that dust settles, the stock can quickly rerate to better levels.
EIX has a forward dividend yield of 6.61% and has been paying dividends for 22 years. The analyst upside may be a conservative target if the clarity over wildfire lawsuits comes sooner.
3. NetApp Inc. (NASDAQ:NTAP)
NetApp, Inc. (NASDAQ:NTAP) provides products and services related to data infrastructure globally. The company has two segments through which it earns its revenue: Hybrid Cloud and Public Cloud. The stock was recently upgraded from Underperform to Neutral, with the price target bumped up from $121 to $128.
The increasing demand for public cloud as a result of the AI infrastructure spending has expanded the company’s Total Addressable Market. As the company continues to gain market share and keep gross margins table at 71%-72%, the growth prospects look solid.
Additionally, analysts see operating margins growing to around 30% with healthy free cash flows. All this is likely to improve the stock’s prospects, though outperformance is still unlikely, hence the upgrade to Neutral only.
2. Airbnb, Inc. (NASDAQ:ABNB)
Airbnb, Inc. (NASDAQ:ABNB) is a well-known platform for people to look for a place to reside when traveling. It connects people looking for living space to people who want to offer theirs, allowing seamless booking without involving any professional hospitality service provider like hotels.
The stock is up 20% in the last few days and for good reason. First, the company announced its Q4 earnings, registering double-digit growth in revenue as well as bookings. The company’s gross booking values have gone up threefold since its stock hit the market back in 2020. The firm is working on expanding its global footprint to strengthen its core business while simultaneously launching fresh initiatives.
The company’s stock was upgraded yesterday from Hold to Buy, with a price target of $190, a further 20% upside from here on. There are still concerns about the short-term volatility though. The stock has just gained 20% within a short period of time and the market may take some time to digest the new prospects before the stock can continue its next leg up.
1. Gilead Sciences, Inc. (NASDAQ:GILD)
Gilead Sciences, Inc. (NASDAQ:GILD) operates as a biopharmaceutical company that develops, discovers, and markets medicines. It offers Descovy, Truvada, Stribild, Biktarvy, Odefsey, Genvoya, Atripla, and Sunlencs products. The company collaborates with various companies including Dragonfly Therapeutics, Inc.; Merck Sharp & Dohme Corp., Janssen Sciences Ireland Unlimited Company; and Tentarix Biotherapeutics Inc. The company received a boost when Deutsche Bank upgraded the stock from Hold to Buy based on the company’s pipeline of HIV drugs. Earnings estimates were also increased from 2029 onwards.
GILD’s HIV treatment Biktarvy’s patent was supposed to expire after 2033. However, with its pipeline products, the company can now add approximately $19 billion to its revenues, significantly changing analyst projections. This optimism comes after the FDA put the company’s Lenacapavir treatment for HIV under priority review, setting a June 19 FDUFA date, which is essentially a deadline for the agency to approve or reject a new drug.
Deutsche Bank has accordingly upgraded the price target from $80 to $120, a significant 50% boost.
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Disclosure: None. This article was originally published at Insider Monkey.
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