Street call of the week By Investing.com

Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.

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Alaska Airlines

What happened? On Monday, Melius upgraded Alaska Air (NYSE:) to Buy with a $56 price target.

*TLDR: Melius sees disciplined capacity setup as an opportunity for positive revisions in 2025. Alaska Airlines benefits from Hawaiian synergies; strong management and market share in key regions.

What’s the full story? The analysts at Melius highlight the volatile nature of airline stocks, noting that while the industry is challenging, there are periods when stocks significantly outperform. They believe that the current disciplined capacity setup, driven by the need to fix margins, presents a real opportunity for positive revisions in 2025. For instance, United Airlines could see earnings power of $20 by 2027 compared to $10.21 in 2024.

Earlier in the year, Melius downgraded Alaska Airlines due to concerns about the Hawaiian acquisition being a distraction. However, unexpected capacity rationalization from JetBlue and Southwest has favored Alaska’s West Coast markets. Despite Hawaiian Airlines expected to dilute earnings by 22% in 2025, Melius believes Alaska’s management can quickly address and improve Hawaiian’s fundamentals. They anticipate more details at the investor day on December 10th, where there could be upside to initial synergy expectations.

Alaska not only benefits from Hawaiian synergies but also boasts one of the strongest management teams with top market share in the Pacific Northwest, California, and now Hawaii.

Buy at Melius means “Melius uses a three-point rating methodology at the stock level of Buy, Hold, Sell. The rating is versus the S&P 500. We maintain the view that our work uncovers mispricings that become more pronounced over a longer time horizon, therefore our investment horizon is typically 2 years, though we often will state or include shorter term views as we see catalysts and events that merit the distinction.“

Tapestry

What happened? On Tuesday, TD Cowen downgraded Tapestry (NYSE:) to Hold with $52 price target.

*TLDR: TD Cowen downgrades stock to Hold; cautious due to muted trends in China and U.S. Stock near $52 target; strong margins but wary of multi-year comparison and CPRI deal risks.

What’s the full story? TD Cowen notes that the stock is within 3% of its $52 price target, driven by a solid price growth of +40% year-to-date and +85% over the last 12 months, resulting in a P/E ratio of 11x compared to a 9.5x five-year average. However, the brokerage house remains cautious due to muted consumer trends in China and the U.S., potential risks associated with the pending CPRI deal, and the overall portfolio platform strategy.

In the U.S., sales have moderated to flat or slightly negative, but margins have remained strong due to full-price selling. TD Cowen is wary of the challenging…