Research Reports — Barrons.com

These reports, excerpted and edited by Barron's, were issued recently by investment and research firms. The reports are a sampling of analysts' thinking; they should not be considered the views or recommendations of Barron's. Some of the reports' issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

Lowe's Cos. — LOW-NYSE Outperform — $219.57 on Nov. 19 by Mizuho Lowe's shares are seeing a relief rally, as third-quarter results cleared a very low bar, following weak results out of Home Depot. Lowe's comps slightly outperformed its larger peer, with that occurring only once in the prior eight quarters.

A few highlights: 1) Guidance changes are consistent with the low end of initial fiscal-year 2025 expectations, with margin pressure from two acquisitions layering in; 2) Average ticket expanding by 3.4% could indicate that Lowe's is taking more price than Home Depot's 1.8% gain reported recently; 3) Agentic technology and the Mylow agent are seeing early traction with about a million prompts per month and helping drive much higher conversion (two times versus normal) for do-it-yourself customers.

While management did point to a more cautious consumer and still-uncertain timing around the eventual housing inflection, we look favorably upon third-quarter results and November-to-date comps being positive. Resetting estimates and price target to $272.

Rocket Cos. — RKT-NYSE Buy — $17.17 on Nov. 19 by BTIG Research & Strategy We think Rocket Cos. stock offers the highest-quality alignment between origination and servicing. There may be somewhat limited near-term earnings accretion from the merger with Mr. Cooper, but we think it supports an earnings profile that makes Rocket's earnings and valuation less binary with respect to interest-rate volatility, and the operational scale supports a lower cost of capital and more stable leverage versus its competitors. Average daily traffic in the stock has more than doubled since the Mr. Cooper deal closed on Oct. 1.

We think the boost in trading liquidity has created an even more fertile battleground between technology, media, and telecommunications investors, who see it as an inexpensive substitute versus some tech/software stories, and financial institution group investors, who are bullish on most of the fundamental components, but grapple a bit more with the valuation.

We're still at 60 cents earnings per share next year with rough sensitivity to get up near 80 cents with mortgage rates down 50 basis points from here, and assuming stable margins around 2.75%. There's upside near $1/share if gross margins get back above 3.25%, which is still far from the pandemic highs of 4.5% when the stock went public. Price target: $25.

OneMain Holdings — OMF-NYSE Neutral — $57.32 on Nov. 19 by Seaport Research Partners We are reducing our 2025 EPS estimate from $6.72 to $6.62 and our 2026 estimate from $8 to $7.75 on the expectation that credit improvement will occur at a more gradual pace than we originally incorporated into our model.

First, we had forecast that the Consumer and Insurance charge-off rate would decline about 35 basis points to 7.25% in 2026, which we now believe was a bit too optimistic. We have adjusted our 2026 charge-off rate expectation into the 7.35% to 7.4% range.

Second, our higher charge-off rate forecast implicitly increases the provision for loan losses. We have assumed that the reserve rate will decline slightly in 2026, but less so relative to our prior estimate. All other variables including yield, originations, portfolio growth, and expense ratios remain the same.

IBM — IBM-NYSE Outperform — $290.86 on Nov. 19 by Evercore ISI We met with IBM CEO Arvind Krishna and Global Head of Investor Relations Olympia McNerney recently; discussions centered around the company's strategy, management's thoughts on the broader macro backdrop, enterprise AI vision, mergers-and-acquisitions philosophy, productivity initiatives, and Quantum compute opportunity among other trending topics.

Our conversations reinforced our view of IBM as a macro-resistant hybrid information-technology/AI leader that is well positioned to benefit from several tailwinds, including enterprise AI adoption, focus on productivity initiatives, prioritization of data sovereignty, and Quantum differentiation....

Net/net: We see multiple vectors for growth over the medium term. Maintain $315 price target.

McDonald's — MCD-NYSE Hold — $304.59 on Nov. 18 by Stifel McDonald's is working to improve its menu architecture, with a particular focus on value at every tier and lower core menu pricing for combo meals in an effort to improve value perception among consumers. While we believe that resetting the value proposition is necessary to stimulate transaction growth, particularly in a challenging consumer environment, we would like to see more evidence that the company's investments can lead to sustained transaction growth amid fierce quick-service-restaurant competition from both generalist and specialist brands. Our Hold rating reflects our view that the valuation is fair. Price target: $315.

Dolby Laboratories — DLB-NYSE Buy — $64.96 on Nov. 18 by Rosenblatt Despite a difficult macro, Dolby delivered a solid fiscal fourth quarter and guided full-year revenue and EPS consistent with expectations. Along the way, Atmos and Vision continue to scale, and the company discussed a potential new avenue for total-addressable-market expansion around streaming. We continue to like the long-term story and believe that Dolby is a good value here for long-term-focused investors. Price target: $85.

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