From consumer prices and interest rates to workers’ wages and California dried grapes, there’s a lot of raisin’ going on these days.
On pace for its first four-month winning streak since 2021, the S&P 500 is hovering near a 52-week high as fear-of-missing-out (FOMO) trading returns. In recent days, Wall Street analysts have felt FOMO as well, boosting their price targets to reflect reduced recession probabilities and improved investor sentiment.
What exactly is a price target anyway?
A price target is a research analyst’s projection for where a stock’s price will be at some point in the future. Typically the time frame is 12 to 18 months.
Analysts use fundamental analysis and a variety of valuation techniques to arrive at what they think a company’s equity will be worth. The targets derived from their valuation models are often presented as part of a detailed research report that includes a buy, hold or sell recommendation.
When an analyst price target change hits the newswires, it can have a significant impact on stock price movement. And because macroeconomic factors and industry dynamics can affect companies that operate in the same business, that stock’s peers can move in the same direction.
Often there is power in numbers. While a stand-alone upgrade from one firm may cause traders to react, multiple price target updates on the same stock can be a powerful signal.
These are a few of the large caps that have recently had their price targets raised by more than one analyst.
Why Are Adobe Price Targets Increasing?
Adobe Inc. (NASDAQ: ADBE) has been trending higher over the last nine months, as have price targets on the stock. The cloud software provider is benefiting from a technology sector rebound and an improved outlook for the digital advertising market. Demand for core products like Acrobat, Flash Player and Photoshop is expected to pick up in the quarters ahead as businesses resume their digital transformations and ad spending normalizes.
Several analysts raised their Adobe target prices in June, and the market has been quick to react. Month-to-date the stock is already up 17% and fast approaching even the most bullish of targets. On Wednesday, Jeffries increased its target to $530 in anticipation of a strong second-quarter report. Last week a trio of firms raised their targets to $500.
Much of the recent optimism is around Adobe’s expected push into generative artificial intelligence (AI). If the company adds more AI capabilities to its Creative Cloud suite, professional customers are likely to pay up, according to commentary from BMO Capital. Adobe’s pending takeover of collaboration platform Figma could also be a growth catalyst, given worldwide work-from-home trends.
What Does Wall Street Think of Ollie’s Stock?
There’s been a wave of price target increases for Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) since the discount retailer posted better-than-expected fiscal Q1 results on June 7th. Adjusted earnings per share (EPS) surged 145% and topped the Street’s forecast as shoppers sought out hard-to-find deals and store productivity initiatives kicked in. CEO John Swygert noted that “more higher income and younger-age shoppers” are being turned on to Ollie’s, which is expanding its customer base.
Earlier this month, Goldman Sachs raised its Ollie’s target to $68 but curiously maintained a Neutral rating even though this now implies more than a 10% upside. Truist Financial and UBS have bumped up their targets but, like Goldman, weren’t ready to call the rebounding retailer a buy. Gordon Haskett Capital, on the other hand, took a bullish stance on Ollie’s, as did Craig Hallum.
Although Ollie’s raised its full-year sales and profit outlook, not everyone on Wall Street is enamored, with valuation the most likely reason. The stock is trading at 32x trailing earnings, which, unlike Ollie’s closeout bargains, is not cheap.
Does Molson Coors Stock Have Good Upside?
The consensus price target on Molson Coors Beverage Co. (NYSE: TAP) actually suggests that there is a downside to the stock. But not everyone on Wall Street agrees.
Earlier this month, Jeffries raised its target to a Street-high $75, saying the beer maker could continue to benefit from the Bud Light LGBTQ backlash in the back half of the year. A recent survey conducted by the research firm revealed that 65% of beer distributors see Bud Light’s downturn lasting another 6 months, while approximately one-third consider the brand permanently impaired.
Two other research firms have raised a glass to Molson Coors this month, seeing better financial results and share prices ahead. The Miller Lite and Coors Light producer delivered a big Q1 earnings beat driven by market share gains in the U.S. and U.K.
The stock has surged 30% year-to-date to a 5-year high, but the Bud Light effect and an attractive 2.5% dividend could keep it bubbling higher.