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.
General Motors -- GM-NYSE Strong Buy -- $87.04 on July 27 by Tigress Financial Partners We reiterate our Strong Buy rating on GM and increase our 12-month target price to $130, as a cadence of new models, combined with AI-driven operating efficiencies and opportunities in software and defense, drive a higher-margin, multiengine growth story and a compelling investment opportunity.
GM's second-quarter results show a resilient truck and SUV franchise converging with fast-scaling software, defense, and insurance businesses into multiple engines of margin expansion, and with electric-vehicle charges now largely behind it, GM has a compelling case for a higher valuation multiple and sustained shareholder value creation....
GM is building a billion-mile, billion-dollar software and AI business with OnStar, Super Cruise, Gemini, and Nvidia that is rewriting its margin and growth story. GM Defense is building a $1 billion, 30%-plus-growth military business that gives GM's core investment thesis a high-margin, recession-proof edge. GM's capital allocation strategy targets reinvestment, onshore, and accelerating shareholder returns.
Lithia Motors -- LAD-NYSE Buy -- $376.94 on July 29 By Seaport Research Partners Lithia Motors reported second-quarter 2026 adjusted earnings per share of $10.03, which compares to our/consensus forecasts of $8.70/$8.73, respectively. The print was clean, the result of solid all-around performance with meaningful improvement in certain areas such as used-vehicle GPU and selling, general, and administrative expenses as a percentage of gross profit. Revenue was right in line, with used-vehicle prices (4.3%-plus year over year) fully offsetting volumes that were slightly light (and associated finance and insurance).
From a margin perspective, gross margin for all segments came in ahead, with new GPU essentially flat sequentially (another sign of normalization), used GPUs $339-plus sequentially, and Service & Parts 160-plus basis points Y/Y. Driveway Finance generated record income of $37 million, record originations of $884 million, and a 17.5% penetration rate. But the biggest driver of the earnings beat was better-than-expected SG&A performance -- at 68.6% of gross profit on an adjusted basis, that was a 290-bps sequential improvement and accounted for more than $1 in EPS upside versus our expectation. Target price: $390.
Cognizant Technology Solutions -- CTSH-Nasdaq Positive -- $50.31 on July 29 by Susquehanna Cognizant Technology Solutions reported growth just above expectations, driven by 12% growth in banking and financial services. Bookings looked solid, signing seven large deals (including a megadeal) and delivering a last-12-months book-to-bill ratio of 1.3 times. The guidance now looks prudent: If they are just above the third quarter, the fourth-quarter (Q/Q) seems safe standing up some previously announced contracts. From our callback, they seem to have better fourth-quarter visibility than we would have expected as work ramps in both the third and fourth quarters.
They sound good about banking and financial services, and healthcare (especially TriZetto Healthcare Administration Solutions), even if the communications part of Communications, Media & Technology is soft. Given the modest multiple, and the portfolio leadership, we are staying Positive despite trimming our price target to $82 on peer group compression.
SiriusXM Holdings -- SIRI-Nasdaq Buy -- $31.68 on July 29 by Benchmark Equity Research We maintain a Buy rating on SiriusXM Holdings with a $30 price target that is below current trading level....We view recent stock price momentum as more attributable to aggressive renewed attention to spectrum monetization rather than lauding CEO Jennifer Witz's well-conceived operational and strategic initiatives. We expect spectrum economics will necessarily be achieved through partnerships and new internal uses rather than another seminal TMT mergers-and-acquisitions transaction.
SiriusXM's audio core subscription business does appear less vulnerable to step function deterioration than cable broadband and manifests superior current economics relative to most current video-streaming businesses.
Caesars Entertainment -- CZR-Nasdaq Hold -- $29.84 on July 28 by Texas Capital Securities Following Caesars Entertainment's second-quarter 2026 4% Ebitdar miss driven by lower than forecast Strip and digital results, we lower estimated calendar-year 2026/estimated calendar-year 2027 Ebitda 1%/1%. Caesars didn't host an earnings call or provide an update on its definitive agreement to be acquired by Fertitta Entertainment.
Our price target remains $31 per share, which mirrors the all-cash deal proposal from Fertitta Entertainment....After accounting for lower table hold, we calculate Strip Ebitda was still 4% below consensus estimates. Digital was mostly in line, adjusted for hold. Regional Ebitda beat by 7%. Given the current M&A backdrop and Caesars' July 28 closing price, which is 3.4% below its $31 per share cash agreement with Fertitta Entertainment, we maintain our Neutral rating.
To be considered for this section, material should be sent to Research@barrons.com.
Comments