Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Monday - US Markets Closed, MLK Day.
Ciena Corp.
What happened? On Tuesday, BofA downgraded Ciena Corp (NYSE:CIEN) to Neutral with a $260 price target.
*TLDR: Ciena’s stock surges on hyperscaler growth. BofA downgrades amid backlog risks.
What’s the full story? Ciena’s stock blasts through records, trading at a lofty 40x forward P/E—double its decade-long average—like a riverboat gambler betting the farm. Hyperscalers fuel this optical frenzy, juicing revenue growth from a meager 8% to a roaring 30% in 1Q26, with a $5bn backlog locking in next year’s haul. The analysts reckon this cycle’s got stamina, powered by scale-across deployments exploding 11x to $808mn by 2026, and 800G tech where Ciena leads the pack.
As market share swells from 18% in 2024 to 22% in 9M25, Ciena dominates cloud providers with 50% grip via its RLS systems and WaveLogic 6 Nano on 3nm DSP, outpacing Cisco and Marvell in power efficiency. But echoes of 2022 haunt: backlog once covered 96% of revenues, then cratered 38%, tanking the stock 12%.
With shares at 45x P/E on peak growth bets, risks loom from backlog slips. BofA downgrades to Neutral, holding $260 PO for a slim 7% upside—valuation’s already priced this circus.
Ulta Beauty
What happened? On Wednesday, Raymond James upgraded Ulta Beauty Inc (NASDAQ:ULTA) to Strong Buy with a $790 price target.
*TLDR: Raymond James upgrades ULTA. Growth initiatives drive earnings upside despite risks.
What’s the full story? Raymond James upgrades ULTA to Strong Buy from Outperform, hiking the price target to $790 and nudging FY26 EPS to $28.60 from $28.51, betting on a cocktail of initiatives to rev the growth engine. As FY26 dawns, beauty demand roars on, cashing in on last year’s rebuild: a fresh management crew, loyalty tweaks, digital sneakiness, and fresh aisles in Wellness and Marketplace. Now, the outlet eyes data dives and agentic AI, plus a toe-dip into international waters, all primed to juice earnings without begging for multiple magic.
Upside whispers of harvest time after the investment plow, with stores, online, and global plays blooming. Yet, shadows lurk—fiercer rivals hawking beauty, a U.S. demand sputter, ballooning costs, or botched launches abroad.
Still, ULTA’s savvy split between premium and bargain hunters, its loyalty stranglehold, and this pivot to reaping make the risk-reward a gambler’s delight, justifying that Strong Buy swagger.
Palantir
What happened? On Thursday, PhillipCapital initiated Palantir Technologies Inc (NASDAQ:PLTR) at Buy with a $208 price target.
*TLDR: Palantir revenue surges 47% to $4.2B. Net profit grows 1.9x; target $208. PhillipCap seeing buying oppy.
What’s the full story? Palantir’s group revenue surges 47% year-over-year to $4.2 billion in FY25e, as the mix tilts toward commercial firepower at 51% growth, outgunning government’s 43% clip. It’s all fueled by enterprises gobbling AI like degenerates (using Reddit parlance), expanding beyond defense bunkers into wild industry frontiers. Net profit doubles down, ballooning 1.9x.
In the U.S.—Palantir’s fat 66% revenue slice—growth accelerates 66% YoY, propelled by Uncle Sam’s spy-spending spree amid global dust-ups, plus commercial deals exploding ~2x in 3Q25 thanks to AIP wizardry and ontology sorcery boosting productivity.
Phillips initiates coverage with a DCF-derived target of $208, baking in 8.3% WACC, 4.2% risk-free rate, and 8% eternal growth. Forward P/E lounges at 170x, under the 190x deviation floor, priming for a re-rating as fundamentals harden and markets swell like a Twain tall tale (ask whatever automated program you’re using that passes as AI “what Twain Frog is” if you missed it).
Starbucks Co.
What happened? On Friday, William Blair upgraded Starbucks Corporation (NASDAQ:SBUX) to Outperform without a price target.
*TLDR: Starbucks expects domestic comp gain soon. William Blair upgrades to Outperform.
What’s the full story? Starbucks claws back its first domestic comp gain in two years this December quarter, priming the pump for positive full-year vibes in fiscal 2026. The real brawl’s over margin recovery: Americas margins slump to 13.4% in 2025 from 20.8% peaks, then get hammered by half a billion in labor costs next year.
William Blair eyes details at the January 29 investor day, betting on a multiyear slugfest of G&A cuts, productivity jolts, and steady comps.
With 3% global unit sprawl and low-single-digit comps, consolidated margins creep near 2023 glory by 2030, fueling a 15-20% EPS CAGR over five years. Stock’s up 15% YTD, but the report spies a path to $140+ by 2029 at 30x P/E on $4.70+ EPS, dishing 10% share CAGR with upside if comps rev like a riverboat engine.
Thus, William Blair upgrades Starbucks to Outperform, noting sales revival outpaces margins, with profit fireworks igniting in earnest come 2027.
