By coinnews 
00:00:03 Speaker A
Now it’s time for some of today’s trending tickers. We’re watching Southwest Airlines and Starbucks joining me now. We’ve got Yahoo Finance senior reporter, Alexandra Canal. Ali, great to have you here. Let’s set the stage for this first one, Southwest Airlines. They are catching an upgrade at Deutsche Bank from hold to buy. The firm sees more upside ahead, citing the airline’s ongoing transformation as a result of its deal with activist investor, Elliott Investment Management shares right now, they are higher by about 2.4%. Ali.
00:00:44 Ali
Yeah, and Elliot now has about an 11% stake in the company that’s led to a new board, which Deutsche Bank says has over 200 hours of aviation experience. Uh it’s also, you know, something that comes on the heels of improved revenue initiatives for this company, like a signed seating, extra leg room, bag fees, which just went into effect on Wednesday. So overall, more upside ahead, which is fueling this upgrade and price target raise as well. Deutsche Bank sees the stock going to $40 per share. Now there’s still some risk ahead. Deutsche Bank cited a few possible headwinds, including fuel price, volatility, execution risk on these new initiatives, and then some of those macroeconomic concerns like regulation and labor issues. Like you said, Brad, we’re up about 3% today, but roughly flat on the year. So it’s going to be interesting to see how companies like Southwest and really other competitors do in the months and years ahead.
00:01:57 Speaker A
Absolutely. We’re also tracking the brand of the green siren here today. Starbucks getting a downgrade to hold from buy at TD Cohen. The firm expects future profits to be lower than Wall Street’s estimates, citing labor costs, increasing competition and deteriorating value perceptions. Shares of SBUX, they’re taking a hit on the day. They’re down by about 1.7% right now on this downgrade.
00:02:31 Ali
Yeah, TD Cohen modeling earnings per share 10% below consensus. The labor story seems to be a big part of this downgrade, along with menu pricing. The bank noted that Starbucks appears to be holding back on price hikes and increasing labor hours, and they said that suggests that the post-COVID earnings that they were inflated. Now, at this point, the company is in the middle of a big turnaround effort led by CEO Brian Nickel. He’s also the former CEO of Chipotle. And Nickel seems to be leaning on operations and marketing to return the company to its former glory, but TD Cohen still expects more muted same store sales growth in the months ahead. They did have some proprietary survey data, which you mentioned, Brad, that showed weakening value and quality perceptions compared to its peers, along with the fact that its track record in past recessions raises some concerns if the macro continues to weaken from here. So a lot of obstacles at a time when you’re seeing shares down about 7% year to date, and near the low end of its 52 week range.
00:03:48 Speaker A
All right, a lot to continue to keep tabs on there for Starbucks as well. You can scan the QR code below to track the best and worst performing stocks of the session with Yahoo finances trending tickers page.