| | | Notable analyst calls this week: Okta, Chipotle and Zscaler stocks among top picks
Mar. 08, 2025 9:35 AM ET
By: Tiyashi Datta, SA News Editor
 Mikko Lemola
The S&P500 ( SP500) closed in the green on Friday, after U.S. President Donald Trump's tariff policies, jobs report and quarterly earnings from chipmaker Broadcom and Marvell Technology dominated headlines during the week.
For the week, both Nasdaq ( COMP:IND) and Dow ( DJI) declined over 1%.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Wall Street bullish on Okta after Q4 results
Okta (NASDAQ: OKTA) was upgraded to Buy from Neutral by D.A. Davidson, after the company demonstrated growth stabilization and solid enterprise adoption when it released its fourth quarter fiscal 2025 financial results and outlook.
"With increasing new product mix, enterprise traction, channel momentum, and sales productivity, we now believe double-digit growth is sustainable," said D.A. Davidson.
Mizuho Securities also upgraded Okta to Outperform from Neutral and increased its price target to $127 from $110, saying Okta has a number of opportunities to drive growth higher in coming years. Meanwhile, Stifel and KeyBanc maintained their bullish rating on the stock.
JPM says airlines industry faces uncertainty, downgrades Southwest Airlines
Southwest Airlines (NYSE: LUV) was downgraded to Underweight from Neutral by J.P. Morgan, saying that the carrier’s “best margin and return on investment capital days lie in the past.”
“While we’re all for well-managed turnarounds, the ask at Southwest (if one embraces the concept of returning to the industry’s margin perch) is herculean in nature,” JPM said.
The brokerage set a more cautious outlook for the airlines industry. It added that dwindling demand for government travel could disproportionally impact American Airlines (NASDAQ: AAL), while for United (NASDAQ: UAL) the decline in government travel will be less evident.
Chipotle receives upgrades from Morgan Stanley
Morgan Stanley upgraded Chipotle Mexican Grill (NYSE: CMG) to an Overweight from Neutral on its view the restaurant chain is seeing some choppy demand trends, but not facing structural issues that alter the long-term bull thesis.
Analyst Brian Harbour and his team assigned a PT of $70 and think the positive Chipotle drivers of product, marketing, and throughput should still be effective in delivering a decent 2025 and beyond.
MS says Tesla still a ‘top pick’, Wedbush adds to Best Ideas List
Tesla (NASDAQ: TSLA) is still a top pick at Morgan Stanley despite recent softening sales trends. Analyst Adam Jonas thinks Tesla's softer auto deliveries are emblematic of a company in the transition from an automotive pure play to a highly diversified play on AI and robotics.
Wedbush Securities also added the EV maker to its Best Ideas List amid what it calls a gut-check moment for the electric vehicle stock, with bears seen as controlling the narrative.
“Autonomous will be the biggest transformation to the auto industry in modern-day history and, in our view, Tesla will own the autonomous market in the US and globally,” said Wedbush analyst Dan Ives.
Campbell's downgraded on Rao’s growth deceleration
J.P. Morgan downgraded The Campbell's Company (NASDAQ: CPB) to Neutral from Overweight, with analyst Ken Goldman and his team saying Rao’s growth has decelerated, and the company's overall snacks margin story has been delayed perhaps indefinitely, due in part to soft category demand dynamics.
"In our view, the CPB shares could outperform their peers over the next year if the snacking category improves; however, right now we are not seeing much evidence of this taking place," JPM said and assigned a price target of $37.
BofA upgrades Zscaler after quarterly results
BofA upgraded Zscaler (NASDAQ: ZS) to Buy from Neutral noting that the cloud security provider's fiscal second-quarter was "healthy" with improvement in upsell capabilities.
Earlier in the week, Zscaler upped its FY earnings guidance after reporting better-than-expected Q2 results. The brokerage, which raised PT to $240 from $215, noted that key positives for the stock include a strengthening portfolio, especially on zero-trust and data initiatives, and a ramp in sales productivity, following last year's changes.
Baird upgraded Bank of America (NYSE: BAC) and Huntington Bancorp (NASDAQ: HBAN) to Outperform and JPMorgan Chase (NYSE: JPM) to Neutral after a broad selloff in bank stocks resulted in an improved risk/reward relative to the broader market.
Stifel downgraded Neumora Therapeutics (NASDAQ: NMRA) to Hold from Buy after efficacy concerns prompted J&J ( JNJ) to discontinue a late-stage program called VENTURA designed to assess a drug candidate similar to NMRA’s lead asset.
Benchmark upgraded Trade Desk (NASDAQ: TTD) to Hold from Sell, saying that varying degrees of global economic, pandemic, competitive, and regulatory dynamics can have positive effects on TTD's ability to execute on near- and long-term strategies, including M&A. |
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