LUV & DLTR Upgrades, DG Downgrade, PANW Cut Into Earnings

Southwest Airlines - Southwest Airlines shares increased by over 3.5% following a bullish upgrade from UBS, which raised its price target to $73, indicating a potential upside of about 40% from previous closing levels [2][3] - UBS estimates that the new seating model and potential bag fees could significantly enhance earnings, projecting an increase of approximately $2.70 per share by 2027 [3] - The firm anticipates that earnings could rise from under $1 in 2025 to above $6 by 2027 due to the introduction of bag fees, suggesting substantial growth potential for the airline [4] Dollar Tree and Dollar General - Dollar Tree received an upgrade to a buy from Redburn, with its price target more than doubled to $165, reflecting strong confidence in its post-restructuring growth [6][7] - Analysts forecast approximately 12% earnings growth for Dollar Tree, indicating it is at a strategic inflection point, while Dollar General was downgraded to a sell with a price target of $111, suggesting a less favorable outlook [8][10] - Despite Dollar General's recent strong performance, analysts believe its current valuation is not justified given its lower sales outlook and margin structure compared to historical growth [9][10] Palo Alto Networks - Palo Alto Networks is expected to report earnings of 93 cents on an adjusted basis, with revenue anticipated to exceed $2.58 billion [12] - Muho has lowered its price target for Palo Alto to $205 from $220 while maintaining an outperform rating, reflecting a cautious outlook amid broader market challenges affecting the software sector [13] - Analysts remain optimistic about Palo Alto's potential for strong earnings despite the recent market pressures on cybersecurity stocks [14]