Wall Street Upgrades Carvana, Reddit, Wingstop: But Retail’s Not Bullish On All

Wall Street witnessed a sell-off on Thursday as higher-than-expected jobless claims dampened the optimism about a potential rate cut in September. However, Carvana, Reddit, and Wingstop had reasons to cheer on Thursday as analysts upped their ratings. Here’s a detailed look at what Wall Street thinks these stocks are worth:

1. Carvana: Wells Fargo has reportedly upgraded Carvana to ‘Overweight’ from ‘Equal Weight’ while raising the price target to $175 from $77. The upgrade follows the firm’s second-quarter earnings, which topped analyst estimates and record expectations of a full-year adjusted operating income of at least $1 billion in 2024. However, retail investors are ‘extremely bearish’ (6/100) on the stock, with the sentiment meter hitting a one-year low, because of valuation concerns and the sluggish outlook on the car market. The stock has already gained over 190% this year.

2. Reddit: Loop Capital reportedly upgraded Reddit to ‘Buy’ from ‘Hold’ while keeping the price target unchanged at $75. The firm reportedly indicated that Reddit's users, revenue, and adjusted operating income are set to exceed their estimates as well as Street expectations. On Thursday, Reddit acquired ad creative optimization platform, Memorable AI, to further advance campaign performance and impact. The social media firm said the acquisition allows accelerating work in optimizing, generating, and selecting ad creative to deliver even better results for advertisers. Retail sentiment on Stocktwits has flipped into the ‘bullish territory’ (56/100) from the ‘bearish zone’ a day ago.

3. Wingstop: Raymond James reportedly upgraded Wingstop to ‘Outperform’ from ‘Market Perform’ and has a price target of $42 on the stock. The firm believes its concerns on valuation are more than offset by Wingstop’s raised long-term average unit volume and unit growth targets. One of the highlights that Raymond James pointed out was the quadrupling of the marketing spends versus 2019 which has been crucial in pushing customer engagement. Retail sentiment is trending in the ‘bullish’ territory (64/100), down from the ‘extremely bullish’ zone a day ago.