Latest news with #Fiscal2025
Globe and Mail
2 days ago
- Business
- Globe and Mail
Top Analysts Stay Bullish on Broadcom Stock (AVGO) Despite Post-Q2 Earnings Decline
Semiconductor company Broadcom (AVGO) reported a modest earnings beat for the second quarter of Fiscal 2025, driven by artificial intelligence (AI)-led demand for its offerings. However, AVGO stock was down more than 4% in Friday's pre-market trading (as of writing), as investors seemed to have lofty expectations from the maker of application-specific integrated circuits, or ASICs. Confident Investing Starts Here: Analysts React to Broadcom's Q2 FY25 Earnings Following the Q2 print, Baird analyst Tristan Gerra highlighted Broadcom's continued strong execution and solid fundamentals. While the 4-star analyst acknowledges that Broadcom is well-positioned to remain the leader in custom AI ASIC solutions, he argues that GPUs (graphics processing units) will continue to play a primary role, including in AI inferencing. He added that Broadcom's AI XPU revenue in 2026 could be mainly driven by new customers, while the Tomahawk 6 offering is expected to drive robust AI networking top-line growth in the first half of FY26. Gerra reaffirmed a Buy rating on AVGO stock but maintained the price target at $210, noting that the stock's valuation is rich, mainly compared to Nvidia (NVDA). He believes that Broadcom stock is trading at an elevated valuation, given his expectation of a 'potential 1H26 slowdown in XPU QoQ revenue comps before new customer ramps take place.' Meanwhile, Mizuho analyst Vijay Rakesh reiterated a Buy rating on Broadcom stock and increased the price target to $310 from $300, noting the company's industry-leading FY25 gross margin and operating margin estimates at about 79% and 65%, respectively, and expectation of free cash flow (FCF)/year growing to about $31 billion. The 5-star analyst pointed out the accelerating AI inference demand and projects Broadcom's AI revenue to grow to about $19 billion in FY25 and nearly $32 billion in FY26. Likewise, Deutsche Bank analyst Ross Seymore boosted the price target for Broadcom stock to $270 from $205 and reiterated a Buy rating. The 5-star analyst noted that the company's results and guidance were essentially in line with expectations, with the AI business delivering upside, the software business remaining steady, and the non-AI semiconductor business witnessing a slower recovery. Seymore contends that while the dearth of a cyclical recovery in the non-AI business could continue to be a headwind into Q4 FY25, he expects investors to 'more eagerly focus' on the rise in Broadcom's AI business. Is AVGO Stock a Buy, Hold, or Sell? Wall Street has a Strong Buy consensus rating on Broadcom stock based on 27 Buys and two Holds. The average AVGO stock price target of $260.39 indicates that the stock is fully valued at current levels. These ratings and price targets could see further revisions, as more analysts are expected to react to Broadcom's results and outlook. See more AVGO analyst ratings Disclaimer & Disclosure Report an Issue
Yahoo
31-05-2025
- Business
- Yahoo
Warren Buffett Holds Apple Stock Despite Tariffs and Buys a Restaurant Stock Up 4,500% in 15 Years
Warren Buffett's Berkshire Hathaway continued to hold Apple and added to its stake in Domino's Pizza in the first quarter. Apple stock looks expensive with earnings increasing just 8% in the second quarter, and tariffs could slow profit growth even further. Domino's Pizza missed its medium-term guidance in the first quarter, and the stock trades at an expensive valuation. 10 stocks we like better than Apple › Warren Buffett manages the vast majority of Berkshire Hathaway's stock portfolio, and the company made interesting capital allocation decisions concerning Apple (NASDAQ: AAPL) and Domino's Pizza (NASDAQ: DPZ) in the first quarter. Berkshire continued to hold 300 million shares of Apple. The stock currently accounts for more than 20% of its portfolio, the largest position by a wide margin, which is somewhat surprising, given the uncertainty surrounding tariffs. Berkshire bought 238,613 shares of Domino's Pizza, a restaurant stock up 4,500% in the last 15 years. Domino's was one of only seven stock purchases that Berkshire disclosed in the first quarter, but it still accounts for less than 1% of its portfolio. Here's what investors should know about Apple and Domino's Pizza. Apple reported decent financial results in the second quarter of fiscal 2025, which ended in March. Revenue rose 5% to $95 billion, as double-digit growth in services sales offset sub-2% growth in iPhone sales. Generally accepted accounting principles (GAAP) earnings increased 8% to $1.65 per diluted share as the company continued to repurchase stock. But CEO Tim Cook warned visibility beyond June was limited due to tariffs. The investment thesis for Apple centers on its leadership in global smartphone sales and its strong presence in other consumer electronics markets, including personal computers, smartwatches, and tablets. But devices are only half the equation. Apple must monetize its installed base (which exceeds 2.35 billion devices) with services like App Store fees and advertising, iCloud storage, Apple Pay, and subscription products like Apple TV+. The company is executing fairly well on that strategy, but some investors are worried about its ability to monetize artificial intelligence (AI). Apple Intelligence -- a suite of generative AI capabilities -- has fallen flat with consumers since its introduction in October. The iPhone upgrade cycle many analysts predicted never materialized. And Apple has delayed what might have been the most exciting features: an improved version of conversational assistant Siri. Apple Intelligence is currently free, but many analysts expect the company to monetize the platform eventually, possibly by charging a fee for the most sophisticated features. But that future still seems far away. And with smartphone sales forecast to increase at 4% annually through 2029, Apple's revenue growth is unlikely to be much better, at least in the near term. Meanwhile, the company faces a potentially serious threat in recent changes to U.S. trade policy. The Trump administration may have reduced the tariffs on goods imported from China, which is where most iPhones are manufactured, but the president also threatened Apple with a 25% tariff if it chose to make iPhones in India rather than the United States. Personally, I doubt President Trump will follow through on that threat, but Apple's future is still clouded by uncertainty. Can the company effectively monetize AI? To what extent will tariffs hurt profits? Not knowing the answer to those questions is a problem, especially when shares trade at 31 times earnings and earnings only increased 8% in the last quarter. I think prospective investors should avoid the stock for now. However, current shareholders with confidence in Apple can follow Buffett's lead and stay invested, provided they are comfortable with the risks the company is facing. Domino's reported mixed first-quarter financial results. Revenue increased 2.5% to $1.1 billion, which narrowly missed the consensus estimate. But GAAP net income increased 21% to $4.33 per diluted share, beating the $4.07 per diluted share Wall Street expected. Despite mixed results, the company gained market share across its U.S. and international stores, according to CEO Russell Weiner. The investment thesis for Domino's centers on scale and operational excellence. It is the largest pizza company in the world. And its history of technology and menu innovation, coupled with its effective use of promotional cycles, makes me think the company can maintain or even expand its leadership in the coming years. To elaborate, Domino's uses artificial intelligence and robotics to improve efficiency across its business. It produces dough in a centralized facility equipped with robots to control costs and maintain a consistent customer experience across stores. It also uses AI to visually inspect orders and surface insights from user comments on social media. Domino's introduced its "Hungry for More" strategy in 2023. The framework targets three outcomes through 2028: 7% annual sales growth, excluding the impact of foreign currency; 8% annual operating income growth; and 1,100 annual store openings. The company fell short in the first quarter: Sales increased less than 5% excluding foreign currency impact, operating income was flat, and Domino's actually closed a net total of eight stores. Wall Street estimates the company's earnings will increase at 6% annually through 2026. That makes the current valuation of 27 times earnings look expensive. I think investors should avoid this stock right now. Shares were cheaper in the first quarter, which could explain why Buffett added to Berkshire's stake. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino's Pizza. The Motley Fool has a disclosure policy. Warren Buffett Holds Apple Stock Despite Tariffs and Buys a Restaurant Stock Up 4,500% in 15 Years was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-05-2025
- Business
- Yahoo
Barclays Raises Intuit (INTU) PT to $815, Cites Stability in Tax Division
On Friday, Barclays increased its price target for Intuit Inc. (NASDAQ:INTU) from $775 to $815, while maintaining an Overweight rating on the shares. This adjustment follows Intuit's robust fiscal Q3 results, which saw strong performances from both Credit Karma and the Consumer segment. A professional tax preparer, using a laptop to complete an income tax return. Credit Karma is a personal finance platform, whereas the Consumer segment focuses on individual tax preparation, primarily through TurboTax. Intuit increased its revenue by 15% year-over-year in FQ3 to make $7.8 billion. The Consumer Group revenue alone grew 11% to make $4 billion, with TurboTax Live revenue specifically projected to grow 47%. Credit Karma also showed strong growth, with revenue up 31% due to strength in credit cards, personal loans, and auto insurance. Intuit Inc. (NASDAQ:INTU) has now raised its fiscal 2025 guidance across multiple metrics. Revenue growth guidance was increased to 15% from the previous 12% to 13%. Barclays particularly noted increased confidence in Intuit's business strength due to stability returning to the tax division. However, the company anticipates a 1% decline in online TurboTax units this fiscal year, with its share of total returns decreasing by ~1 point. While we acknowledge the potential of INTU to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than INTU and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
24-05-2025
- Business
- Yahoo
Jefferies Raises Intuit (INTU) Price Target, Keeps Buy Rating
On Friday, May 23, Jefferies analyst Brent Thill increased the price target for Intuit Inc. (NASDAQ:INTU) from $735 to $850 and maintained a 'Buy' rating. This adjustment comes after the company's strong and consistent performance, as it surpassed revenue expectations across all segments for three quarters in a row. A professional tax preparer, using a laptop to complete an income tax return. Intuit Inc. (NASDAQ:INTU) also raised its fiscal year 2025 guidance to a year-over-year growth of 15%, up from the previous forecast of 12-13%. This improvement is mainly attributed to the growth of TurboTax Live, which has increased its market share significantly in the assisted tax category. Credit Karma, part of the company's portfolio, also showed strong growth between 29% and 36% year-over-year in the first three quarters of fiscal 2025. For fiscal year 2026, Intuit Inc. (NASDAQ:INTU) has indicated that it has plans to launch new products featuring advanced agentic AI, which are expected to be priced higher. Thrill highlighted the company's strong results for its third quarter of fiscal 2025 and a promising outlook, supported by innovative new products on the way. The analyst believes that these factors justify the increased price target. While we acknowledge the potential of INTU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than INTU and that has a 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds. Disclosure: None.
Yahoo
22-05-2025
- Business
- Yahoo
Warren Buffett's Berkshire Hathaway Doubled Down on Constellation Brands Stock. Time to Buy?
Berkshire Hathaway increased its stake in Constellation Brands by 114%. A low forward valuation and above-average dividend yield should bolster the stock's value proposition. Shifting consumer patterns and tariffs could bode poorly for the stock. 10 stocks we like better than Constellation Brands › Over the last few quarters, Warren Buffett's Berkshire Hathaway was a net seller of stocks. This was also true of the most recent quarter, as its liquidity rose to $348 billion, up from $335 billion in the previous quarter. Still, Buffett and his team bought some stocks in Q1, and its fastest-growing position was Constellation Brands (NYSE: STZ). The company increased its stake by 116% and now owns over 12 million shares. Nonetheless, investors like Buffett buy stocks for many reasons. Knowing that, should average investors follow Berkshire's lead in this Warren Buffett investment or stay on the sidelines? Berkshire began buying Constellation Brands stock in the fourth quarter of 2024. On the surface, it looks like a "Buffett stock" with relatively low valuation. Another attribute is the fact that Constellation owns the U.S.'s current No. 1 beer brand, Modelo. With other brands such as Corona beer, Robert Mondavi wine, and High West whiskey, it sells products with the enduring demand investors like Warren Buffett often seek. However, in January, the company reported results for the third quarter of fiscal 2025 (ended Nov. 30, 2024). The misses on net sales and earnings and a $2.25 billion goodwill impairment led to a considerable sell-off in Constellation stock, and it dropped over 17% the day after its announcement. The stock steadily declined further before bottoming in February. While Buffett's team has not commented directly on its activity with this Constellation stock, it may have taken advantage of the lower stock price to more than double its share count. Even though the stock is up about 20% from that 52-week low, it trades at a 47 P/E ratio when figuring in the aforementioned goodwill impairment. Buffett's team likely based its valuation on the 15 forward P/E ratio, which makes it appear inexpensive and includes no one-time charges. Berkshire may also like its dividend. The annual payout of $4.08 per share offers a dividend yield of 2.1%, well above the 1.3% S&P 500 (SNPINDEX: ^GSPC) average. Constellation Brands generated just over $1.9 billion in free cash flow in fiscal 2025 (ended Feb. 28). The 10 straight years of payout hikes may have baked in an expectation of rising dividends. Additionally, since the dividend cost the company $732 million during the same period, it can probably continue to raise its payout, making it an increasingly attractive income stock. However, before being so quick to follow Buffett and his team into Constellation Brands, investors should understand its challenges. For one, there's surprisingly low demand for alcohol among Gen Z. While a variety of factors may explain that decline, it could mean a possible long-term drop in demand for its beverages. Also, softening consumer spending appears to have affected all generations. This could hurt sales as more consumers seek better value. Furthermore, many of its most popular brands come from foreign countries. This is particularly concerning for Mexican beer Modelo, which only recently became the No. 1 beer after capturing the title from Anheuser-Busch InBev's Bud Light. In light of its situation, the company believes it will achieve -2% to 1% net sales growth in 2026. For its "medium-term" forecast, the company previously predicted 6% to 8% net sales growth for fiscal 2027 and 2028. Now, with the possible effects of tariffs added, the company revised the net sales increase to the 2% to 4% range, indicating Constellation shareholders might face years of pain. Under current conditions, Constellation Brands stock looks like a buy for average investors. Admittedly, worries about tariff effects, consumer sentiment, and demographic trends arguably justified a lower earnings multiple, since sales growth appears it is on track to fall. Nonetheless, with the company on track to sell at just 15 times earnings, the sell-off in Constellation Brands stock appears overdone. Moreover, with the dividend yield of over 2% and more payout hikes likely coming, investors have the potential to earn significant returns from both stock price growth and income. Hence, as investors receive more clarity on the tariff front, they may return to this stock, lifting share values over time. Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Will Healy has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy. Warren Buffett's Berkshire Hathaway Doubled Down on Constellation Brands Stock. Time to Buy? was originally published by The Motley Fool
