Mizuho Financial Group's Attributable Income Rises in Fiscal H1

Investing.com -- Mizuho (NYSE:MFG) reiterated its "outperform" rating on UGI Corporation (NYSE:UGI) and raised its price target to $33, citing potential value unlock through operational improvements and growth in its midstream and utilities businesses.

The brokerage noted that while UGI shares have rallied since the company’s fourth-quarter earnings call, there is further room for upside. New CEO Bob Flexon’s focus on stabilizing AmeriGas and addressing the valuation gap has been well-received, Mizuho said.

AmeriGas, which continues to trade at minimal equity value expectations, remains a key factor. Potential asset sales or operational stabilization could act as catalysts, the firm added.

Mizuho said the sum-of-the-parts valuation for UGI exceeds its current trading price, even under conservative assumptions.

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Netflix

What happened? On Monday, Loop Capital downgraded Netflix (NASDAQ:NFLX) to Hold with a $950 price target.

*TLDR: Netflix is poised for growth; valuation concerns persist.

What’s the full story? Loop summarized that Netflix is exceptionally well-positioned, projecting over 30M new subscribers this year, second only to the 2020 pandemic surge. Revenue returned to mid-teen growth, and operating margins are expected to rise by 600bps in 2024, with management consistently upgrading guidance over the past four quarters. A significant Q4 subscriber increase was anticipated due to high-profile events like the Paul/Tyson match and NFL Christmas games featuring Beyoncé.

Co-CEO Ted Sarandos expressed strong optimism about the 2025 content lineup, calling it possibly their strongest since starting original programming. Despite not raising its most popular U.S. pricing tier in almost three years, Netflix remains competitively priced. However, due to historically high valuation multiples, Loop cut Netflix to Hold noting shares are near fair value.

Hold at Loop Capital means “The stock is expected to perform in line with the market or its peer stocks over the next 12 months.“

Tesla

What happened? On Tuesday, Mizuho (NYSE:MFG) upgraded Tesla Inc (NASDAQ:TSLA) to Outperform with a $515 price target.

*TLDR: Mizuho upgrades Tesla, sees significant valuation upside. Price target raised to $515.

What’s the full story? Mizuho’s upgrade comes on the wave of idiosyncratic tailwinds over the coming four years. The firm notes that loosening Autonomous Driving regulatory frameworks provide more FSD/Robotaxi valuation upside, the new Trump administration policies position Tesla better with a lower EV cost structure compared to peers, and TSLA is set to outgrow global light vehicle production with a more profitable EV roadmap featuring the low-cost Model Q/Cybercab in 2026-2027.

Mizuho's SOTP valuation implied approximately $1.8 trillion for Tesla, with core autos, energy, and other segments at around $711 billion, FSD and Robotaxi at $614 billion with upside to $896 billion, and humanoid robots at $472 billion with potential to reach $740 billion. Consequently, Mizuho raised its price target to $515 from $230, aligning with its valuation, driven by positive recalibration with the new administration and FSD/Robotaxi optimism, despite near-term challenges from EU tariffs and EV credit repeals.

Outperform at Mizuho means “The stock's total return is expected to outperform the unweighted, expected total return of the analyst's industry coverage universe over the next 12 months. “

Citizens Financial

What happened? On Wednesday, Raymond (NS:RYMD) James double upgraded Citizens Financial Group Inc (NYSE:CFG) to Strong Buy with a $55 price target.

*TLDR: Raymond James bullish on CFG, boosting NIM/NII. Profits expected to rise.

What’s the full story? Raymond James reports that headwinds from received-fixed swaps are expected to subside, boosting CFG's net interest margin (NIM) and net interest income (NII). The firm anticipates an increase in capital markets fees, outperforming current expectations as the environment becomes more favorable for mergers and acquisitions (M&A) and capital raising. The private banking initiative is projected to see accelerating profitability, while credit concerns appear benign with metrics likely to improve due to contracting rates and a declining contribution from the run-off portfolio.

As a result, the analysts are incrementally bullish on CFG shares, citing the discounted valuation as an attractive entry point for a bank well-positioned to improve its profitability and earnings per share (EPS) growth going forward.

Strong Buy at Raymond James means “The security is expected to appreciate and produce a total return of at least 15% and outperform the S&P/TSX Composite Index over the next six to 12 months. “

Oklo Inc.

What happened? On Thursday, Wedbush initiated Oklo Inc (NYSE:OKLO) at Outperform with a $26 price target.

*TLDR: Wedbush highlighted Oklo's strong position. AI-driven demand boosts Oklo’s prospects.

What’s the full story? Wedbush noted that Oklo, a Santa Clara-based SMR manufacturer founded in 2013, aimed to develop its first small modular reactor by 2027. Backed by Sam Altman, Oklo's Aurora microreactor, scalable to 100MW, will operate for over 10 years before refueling.

Oklo's project pipeline was 93% ahead of its 2027 deployment plan, with data centers accounting for a significant portion of its power under letters of intent.

The analysts highlighted Oklo's unique build, own, and operate business model, selling power directly to customers under long-term contracts for recurring revenues and regulatory streamlining. Despite being in the pre-revenue stage, Oklo planned to accelerate additional revenue streams, including recycling, following its acquisition of Atomic Alchemy.

The AI revolution and growing demand for clean energy put Oklo in a strong position to capitalize on this elevated demand.

Outperform at Wedbush means “Expect the total return of the stock to outperform relative to the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months.

PBF Energy

What happened? On Friday, TD Cowen downgraded PBF Energy Inc (NYSE:PBF) to Sell with a $20 price target.

*TLDR: TD Cowen noted PBF's weak refining performance. West Coast exposure viewed as a detriment.

What’s the full story? TD Cowen noted that PBF has shown peer-low refining results per barrel over the past 1.5 years, due to its high-cost refining system and weak light/heavy differentials. The analysts noted that PBF's significant West Coast exposure could be a detriment through 2025, given increasing renewable diesel imports and continued gasoline demand destruction. TDC is valuing PBF based on a 50/50 NPV of FCF to 2026 at a 10% yield and NPV of EBITDA at 6x, with 2026 as a terminal mid-cycle year.

The valuation incorporated $1/bbl lower cracks than the strip in 2025, $1/bbl higher in 2026, and normalized heavy/light differentials. TD Cowen also highlighted that PBF was currently trading at 5.5x EV/EBITDA in 2026, accounting for changes in capital structure, consistent with the historical trading range, despite limited FCF generation.

Sell at TD Cowen means “The stock is expected to achieve a total return of -10% or below over the next 12 months.”

Investing.com -- Mizuho analysts argued in a note Friday that concerns over PayPal (NASDAQ:PYPL)'s Branded Button market share are exaggerated, maintaining their Outperform rating and $100 price target on the stock.

"Proprietary analysis shows that PYPL's Branded Button share loss worries are overblown," said Mizuho (NYSE:MFG).

The firm said its analysis of PayPal's largest e-commerce partners, including Nike (NYSE:NKE), Etsy (NASDAQ:ETSY), and Airbnb, reveals that the company's Branded Total (EPA:TTEF) Payment Volume (TPV) is growing in line with or faster than its key partners' sales trends.

"The work shows that PYPL is growing in line with/faster than the weighted-average, share-adjusted growth of its major partners," Mizuho stated, noting Branded TPV growth of +6% FXN compared to a +5% growth rate among partners.

Over the past 12 months, Mizuho says PayPal's growth has outpaced that of nine out of its 14 largest merchants.

The analysts see continued strength in Branded Checkout as a key factor for PayPal's valuation. They explain that initiatives like PayPal Everywhere, merchant migration to its updated checkout platform, and Fastlane are expected to provide additional momentum.

"Stability in Branded — along with contribution from new initiatives like PayPal Everywhere, gradual migration of merchants to the newest checkout experience, and Fastlane — makes the stock an attractive candidate for further re-rating in 2025," they write.

Despite recent debates around Branded Checkout's market share, PayPal's valuation is said to remain compelling.

Mizuho says the stock trades at a multiple nearly a standard deviation below its historical average compared to legacy payment companies.

Mizuho values PayPal at 18x its 2026 earnings estimate, a premium to the sector's 16x average, reflecting confidence in Branded TPV growth, improving transaction margins, and new growth opportunities.

The firm acknowledges some near-term headwinds in PayPal's Unbranded business, as the company sheds low-margin contracts.

However, this strategy is expected to enhance profitability over time. "Branded remains solid," and "trends are healthy," Mizuho emphasized.

Investing.com -- Mizuho upgraded Stanley Black & Decker Inc (NYSE:SWK) to "outperform" from "neutral" on improving execution, valuation and a bottoming tools market heading into 2025.

The brokerage raised its price target to $110. Mizuho (NYSE:MFG) noted SWK trades at a 20% discount to building products peers and 40% below electrical equipment/manufacturing stocks.

Stanley Black & Decker shares have lagged significantly, down 15% this year, compared to a 32% gain in electrical equipment/manufacturing stocks and an 11% rise in tools peers. Even big-box retailers, which account for 30% of the company's revenue, have risen 18%.

Mizuho sees potential for mean reversion as tools revenue, down 20% from 2021 peaks, returns to growth. "Underlying rev are down 20% from peak and now back to trend with the bottom in, or very near across entire tools complex," the note said.

Stanley has beaten earnings expectations for two consecutive years following a major profit reset in early 2023. The company has reduced inventories and shown resilience in its professional business, while do it yourself consumer trends hint at stabilization, the note added.

Tariff-related headwinds, previously estimated at $200 million pre-tax, are now largely addressed, requiring only minimal price adjustments for offset.

With a 4% dividend yield and long-term targets that underpin its valuation, Mizuho called SWK on of a top pick among electrical equipment/manufacturing stocks.

Investing.com-- Mizuho (NYSE:MFG) analysts have lowered their price target for Micron Technology Inc (NASDAQ:MU), citing the memory chip giant's weak near-term guidance and continued headwinds in the PC and smartphone markets.

Despite robust growth in high-bandwidth memory (HBM), analysts trimmed estimates due to softer-than-expected revenue and margin projections for the upcoming quarter.

Mizuho maintained an “Outperform” rating but lowered the price target to $115 from $135.

Micron delivered in-line results for its November quarter, reporting revenue of $8.71 billion and earnings per share of $1.79, matching consensus expectations. However, the February quarter guidance fell significantly short, with revenue projected at $7.9 billion, compared to the $8.97 billion consensus estimate, analysts wrote.

Gross margins are also expected to decline to 38.5%, down from 39.5% in the prior quarter, as weak NAND pricing offsets gains from HBM, according to Mizuho.

The highlight of Micron’s performance was its HBM segment, which saw revenue more than double quarter-over-quarter. Mizuho noted that Micron is capitalizing on surging demand for AI-driven memory solutions, with HBM projected to account for $4 billion in revenue in fiscal 2025.

Micron’s market share in HBM is expected to grow from 5-7% currently to 20-25% by late 2025, driven by strong partnerships, including Nvidia (NASDAQ:NVDA) Blackwell GPUs, according to Mizuho.

While Mizuho remains bullish on Micron’s long-term positioning in the AI race, the near-term challenges in traditional DRAM and NAND markets prompted the lower price target.

Micron’s $14 billion fiscal 2025 capital expenditures, largely focused on HBM and R&D, reflect its commitment to leading-edge memory solutions despite current market softness, analysts added.

Investing.com-- Asian chipmaking stocks tumbled on Thursday, tracking steep overnight declines in their U.S. peers after memory chip giant Micron presented softer-than-expected guidance for the current quarter.

Tech stocks were also battered by a wider sell-off after the U.S. Federal Reserve signaled a substantially slower pace of rate cuts in 2025.

South Korea’s SK Hynix Inc (KS:000660) was by far the worst performer among Asian chip stocks, losing about 5%, while peer Samsung Electronics Co Ltd (KS:005930) shed 2.9%.

Both stocks- which are major players in the memory chip industry- tracked a 16% slump in Micron Technology Inc (NASDAQ:MU), after the U.S. firm’s revenue guidance for the current quarter missed expectations.

Micron guided current quarter revenue of $7.90 billion, plus or minus $200 million. The figure missed street estimates of $8.98 billion. EPS was guided at $1.43, missing estimates of $1.91.

The chipmaker’s quarterly earnings mostly met estimates. But the big miss on its guidance fueled concerns over just how resilient artificial intelligence-fueled demand for chips remained going into 2025, after a major spike in sales over the past year.

High-bandwith memory chips are a key component of advanced AI chips. Micron and SK Hynix saw a sharp increase in sales over the past year on this trend.

Analysts at Mizuho (NYSE:MFG) cut Micron’s price target on the guidance miss, but maintained the stock at Outperform, stating that weakness in its traditional memory offerings was likely to be offset by increased demand for HBM chips in the coming year.

Asian chipmaking stocks fall

Losses in Micron and its peers spilled over into broader chipmaking stocks.

Japan’s Advantest Corp. (TYO:6857) and Tokyo Electron Ltd. (TYO:8035) fell 1.7% and 1.2%, respectively, while Taiwan’s TSMC (TW:2330) (NYSE:TSM) fell 1.8% in Taipei trade.

Technology conglomerate tumbled 4%, given that it is heavily invested in tech and chipmaking stocks.

In China, Semiconductor Manufacturing International Corp (HK:0981)- the country’s biggest chipmaker- fell 0.2%, while Advanced Micro Fabrication Inc (SS:688012) fell 1.4%.