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Owens & Minor price target raised to $10 from $9 at Baird
Owens & Minor's Strategic Setbacks and Financial Challenges Justify Sell Rating
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4 minutes ago
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Chipotle Shares Slide on Weak Same-Store Sales. Time to Buy the Dip or Run for the Hills?
Key Points Chipotle saw its same-store sales decline for the second straight quarter. As a result, the company lowered its forecast and now expects flat comparable-restaurant sales for the year. While the company is currently struggling, much of this looks macro-related, which could make the dip a good buying opportunity. 10 stocks we like better than Chipotle Mexican Grill › Chipotle Mexican Grill (NYSE: CMG) has long been one of the most popular fast-casual restaurant chains around, but this year, the company has been struggling to bring in the same type of customer traffic to its restaurants that it's used to. After not seeing a same-store sales decline since 2020, which was early during the COVID-19 pandemic when people were staying home and businesses were shuttered, the company just reported its second straight quarter of comparable-store-sales decreases when it announced its Q2 results on July 23. The weakness started back in January and continued into the spring. With the stock now down 24% in 2025 as of July 24, let's see if this dip is a buying opportunity or if investors should run for the hills. Traffic declines After seeing its comparable-restaurant sales fall 0.4% in Q1, the weakness continued, with Chipotle seeing a 4% decline in Q2. Transactions sank 4.9%, while its average check size rose 0.9%. The company called out May as being particularly weak, but it then began to see a rebound in June, with comparable sales and traffic turning positive. It credited the launch of its limited-time Adobo Ranch dip offering and "Summer of Extras" reward program for the improvement. It said that while July has been choppy, the positive comp and transaction trends have continued. It also called out the strong performance of its Chipotle Honey Chicken limited time offering, saying it accounted for one out of every four orders. Despite the recent rebound, the company lowered its full-year same-store outlook. It now expects comparable-store sales to be flat compared to an earlier outlook of low single-digit growth. However, the company does believe it can still generate mid-single-digit comparable-restaurant sales over the long term. Management does not believe it's making any missteps, with its recent struggles more a result of shifts in consumer sentiment. Overall, Chipotle grew its revenue by 3% to $3.06 billion in the quarter, while adjusted earnings per share (EPS) fell 3% to $0.33. Analysts were looking for adjusted EPS of $0.33 on revenue of $3.11 billion, as compiled by LSEG. Restaurant-level operating margins dipped 150 basis points to 27.4%. This is an important metric, as it measures how profitable each individual restaurant is. The drop appears largely due to higher wage costs and sales deleveraging, as the company said that supply chain and in-restaurant initiatives have more than offset the declines from increasing portion sizes that had been too small. Last year, a number of viral videos called out some locations for skimping on portion sizes, which the company decided to remedy. It said about 30% of its restaurants needed to be retrained on correct portion sizes. Chipotle's goal is to return restaurant-level margins back to the 29% to 30% range in the future, while driving average unit volumes (average yearly sales of an individual restaurant) above $4 million. Is it time to buy the dip? There is no doubt that Chipotle is going through a difficult stretch. The big question is whether this is self-inflicted, or whether this is largely due to a more difficult consumer environment, or perhaps a combination of the two. My guess is it's a little bit of both. There is good evidence that consumers have been a bit more cautious given all the tariff talk and some higher prices. However, I've been to a few Chipotle restaurants this year that have had trash receptacles overflowing and dirty tables, which made me not want to eat there. This is just anecdotal, but if it's more widespread, it could certainly turn some customers off. However, I think it might be easy to fix this issue. Meanwhile, the company still has a long growth runway. It's still really just starting to expand internationally, and it continues to believe it can increase its U.S. locations at an 8% to 10% annual rate. So while Chipotle has certainly become a large operation, it still has plenty of growth ahead. From a valuation standpoint, the stock now trades at a forward price-to-earnings (P/E) multiple of about 38 based on 2025 analyst estimates and 32 based on 2026 estimates. That's not in the bargain bin, but it's cheaper than where it's traded at over the past few years. At this point, while I think there is some room for improvements, I don't think the long-term Chipotle story has changed. I really like its international and continued expansion opportunity, and its core menu and limited time offerings continue to resonate with customers. Consumers still respond to its marketing, and I think it can get back to solid same-store sales growth in a more normal environment. As such, I'd think investors with a long-term outlook can confidently continue to accumulate shares at current levels. Should you invest $1,000 in Chipotle Mexican Grill right now? Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill 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 $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Chipotle Shares Slide on Weak Same-Store Sales. Time to Buy the Dip or Run for the Hills? 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
4 minutes ago
- Yahoo
2 High-Flying Artificial Intelligence (AI) Stocks to Sell Before They Plummet 74% and 30%, According to Select Wall Street Analysts
Key Points Many companies in the center of the AI revolution have seen their stock prices soar in the last three years. These two companies have produced very strong operating results. But their stock prices have outpaced their financial growth, leading to sky-high valuations. 10 stocks we like better than Palantir Technologies › Artificial intelligence (AI) has become one of the biggest talking points for businesses over the last few years. The number of S&P 500 companies mentioning "AI" on their earnings call climbed from less than 75 in 2022 to 241 during the first quarter, according to FactSet Insight. A handful of companies have built big businesses around demand for artificial intelligence, or integrated AI to rapidly expand their addressable markets. Many of those companies have seen their stock prices soar over the last few years. But not every high-flying AI stock is worth buying after a massive run up in its price. Wall Street analysts have soured on two of the strongest performers over the last few years. Some analysts now see tremendous downsides ahead. Here are two AI stocks that could plummet over the next year, according to select Wall Street analysts. 1. Palantir Technologies (74% potential downside) Palantir Technologies (NASDAQ: PLTR) has been one of the best-performing stocks over the last few years. Since the start of 2023, the stock price has climbed an eye-popping 2,290%, and it now trades with a market cap exceeding $350 billion, as of this writing. But multiple analysts think the stock has climbed too far, too fast. Just seven analysts covering the stock rate it a buy or the equivalent. Seventeen say to hold it, and Palantir has four sell ratings. The lowest price target on the Street is RBC's Rishi Jaluria, who has a $40 price target on the stock, a 74% drop from its current price. The reason for the low price target isn't lack of financial results. Palantir has seen its revenue grow substantially over the last few years, as it expands its addressable market through its Artificial Intelligence Platform, or AIP. The new platform makes it easier for users to interact with the big data software and find useful business insights and help make decisions. That's expanded the use cases for Palantir's software, especially as businesses generate more and more data. As a result, Palantir's U.S. commercial revenue has climbed quickly, including a 71% increase in the first quarter. Moreover, Palantir has exhibited tremendous operating leverage. Instead of focusing on marketing and sales, CEO Alex Karp has put most of Palantir's manpower into building a better product. The idea is a better product will do the selling for itself. As a result, adjusted operating margin climbed to 44% in the first quarter, up from 36% in the first quarter last year. Indeed, Palantir is firing on all cylinders. But Jaluria and many others on Wall Street think the valuation of the stock has climbed too high. "We cannot rationalize why Palantir is the most expensive name in software. Absent a substantial beat-and-raise quarter elevating the near-term growth trajectory, valuation seems unsustainable," he said. Shares of Palantir currently trade for 228 times forward earnings and 78 times revenue expectations over the next 12 months. To put that in perspective, only a handful of S&P 500 stocks trade for more than 100 times earnings, and no others trade for more than 26 times sales expectations. Meanwhile, there are other companies growing sales even faster than Palantir, so it's a very hard multiple to justify. 2. CrowdStrike (26% potential downside) CrowdStrike (NASDAQ: CRWD) has seen its share price climb 352% since the start of 2023 on the strength of its Falcon security platform. Despite a massive outage that shut down numerous IT systems around the world last July, the company has bounced back quickly. The stock has more than doubled since its lows last summer, reaching a market cap of nearly $120 billion. But analysts are starting to look at CrowdStrike's stock with an increasingly critical eye. The stock received three downgrades this month from buy to hold, and one analyst initiated coverage with a hold as well. Over the last three months its buy ratings on Wall Street dropped from 41 to 31. And the lowest price target among them is $350, implying a 26% drop from the price as of this writing. Again, valuation appears to be the biggest concern for the stock. Operationally, CrowdStrike has managed to grow its customer base as more enterprises look to consolidate their cybersecurity needs and opt to use CrowdStrike's broad portfolio of services. Forty-eight percent of its customers now use at least six of its modules, as of the end of the first quarter. That's up from 40% two years ago. CrowdStrike is leveraging AI on its platform with agentic AI capabilities through its new Charlotte platform, which helps take action upon detecting a security threat to button up the vulnerability. That's on top of its machine learning capabilities, which help it detect those threats in the first place. And with a growing customer base, it has more data to ingest into its AI algorithms, giving it a significant advantage over smaller competitors. CrowdStrike has managed very strong growth over the last few years. Its annually recurring revenue climbed 20% in the first quarter, exceeding its guidance, and management expects that number to accelerate through the rest of the year as more businesses adopt its Falcon Flex platform. Still, the stock now trades at a price-to-sales ratio of 22 times revenue expectations over the next 12 months. And while that might not seem so expensive compared to Palantir, it makes it the third-highest priced stock in the S&P 500 by that valuation metric. And if you prefer to look at its earnings, it's one of the handful of stocks in the index trading above 100 times estimates, 135 times, to be exact. While it's possible CrowdStrike or Palantir continue to climb higher from here, it's probably worth taking money off the table at this point and finding better values in the market. Do the experts think Palantir Technologies is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Palantir Technologies make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,041% vs. just 183% for the S&P — that is beating the market by 858.71%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike and Palantir Technologies. The Motley Fool has a disclosure policy. 2 High-Flying Artificial Intelligence (AI) Stocks to Sell Before They Plummet 74% and 30%, According to Select Wall Street Analysts 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
4 minutes ago
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Is It Smart To Buy Livestock Improvement Corporation Limited (NZSE:LIC) Before It Goes Ex-Dividend?
Livestock Improvement Corporation Limited (NZSE:LIC) stock is about to trade ex-dividend in four days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Livestock Improvement's shares before the 31st of July in order to be eligible for the dividend, which will be paid on the 15th of August. The company's next dividend payment will be NZ$0.1222158 per share, on the back of last year when the company paid a total of NZ$0.058 to shareholders. Last year's total dividend payments show that Livestock Improvement has a trailing yield of 6.1% on the current share price of NZ$0.95. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Livestock Improvement paid out 56% of its earnings to investors last year, a normal payout level for most businesses. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 28% of its free cash flow as dividends, a comfortable payout level for most companies. It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously. See our latest analysis for Livestock Improvement Click here to see how much of its profit Livestock Improvement paid out over the last 12 months. Have Earnings And Dividends Been Growing? Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Livestock Improvement, with earnings per share up 8.3% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Livestock Improvement has lifted its dividend by approximately 1.4% a year on average. The Bottom Line Is Livestock Improvement an attractive dividend stock, or better left on the shelf? While earnings per share growth has been modest, Livestock Improvement's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects. On that note, you'll want to research what risks Livestock Improvement is facing. We've identified 5 warning signs with Livestock Improvement (at least 2 which can't be ignored), and understanding them should be part of your investment process. If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. 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
