Safran and Target have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – May 27, 2025 – Zacks Equity Research shares Safran SAFRY as the Bull of the Day and Target TGT as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shopify SHOP, Zoom Communications ZM and Peloton Interactive PTON.

Here is a synopsis of all five stocks.

Bull of the Day:

Safran, a global aerospace and defense technology leader based in France, stands out as a rare long-term outperformer in the European equities landscape. The company specializes in aircraft propulsion, equipment, and defense systems, boasting strong competitive advantages through its technological expertise, deep relationships with global aerospace manufacturers, and exposure to high-barrier-to-entry markets. Safran’s durable business model is backed by significant aftermarket services revenue, which provides a steady and recurring cash flow base.

This year, the stock has surged 33%, handily outperforming both the broader European indices and US benchmarks. Its ascent is supported by two powerful macro tailwinds: the migration out of US dollar-denominated assets and renewed investor interest in European defense names, especially in light of shifting geopolitical priorities across the EU.

What’s more, Safran’s long-term track record is equally impressive. Over the past decade, the stock has compounded at an annual rate of 15.1%, consistently outperforming major global benchmarks, even as European equities as a whole have struggled to keep pace with their U.S. counterparts.

With strong price momentum, secular defense tailwinds, and a Top Zacks Rank to back it up, Safran is positioned as a very compelling investment opportunity going forward.

Safran Stock Rises as Analysts Raise Forecasts

As European defense budgets continue to surge, it's no surprise that analysts are taking a more bullish stance on key players in the region and Safran is at the top of that list. The company is widely viewed as a strategic beneficiary of the EU’s renewed commitment to defense modernization and autonomy, particularly amid heightened geopolitical uncertainty and shifting NATO dynamics.

Reflecting this favorable outlook, analysts have been steadily raising their earnings forecasts. Over the past 30 days, consensus estimates for Safran’s current-year earnings have climbed by 5.45%, while projections for 2026 have increased by 4.87%. These upward revisions give Safran it Zacks Rank #1 (Strong Buy) rating, signaling improving earnings momentum and growing confidence in the company's ability to capitalize on structural tailwinds in aerospace and defense.

Upward earnings revisions like these are often one of the most powerful catalysts for stock performance, and in Safran’s case, they reinforce the company’s position as a core holding for investors seeking exposure to both high barrier to entry aerospace manufacturers and long-term defense growth.

SAFRY Shares Have Rerated to a Premium Valuation

Safran shares have clearly rerated higher, now trading at a forward earnings multiple of 34.7x, which is well above their 10-year median of 26.5x. While that might seem elevated at first glance, the valuation premium appears more justified in light of the sweeping geopolitical shifts driving defense spending across Europe.

Importantly, this rerating isn’t unique to Safran. The broader aerospace and defense industry is also seeing multiple expansion, with the sector average forward P/E climbing to 28.2x, also significantly above its long-term median of 21.7x. This signals a revaluation by the market, as investors increasingly favor companies with durable competitive advantages and exposure to rising global defense budgets.

Adding to Safran’s investment appeal is its robust earnings growth outlook. The company is expected to grow earnings at an annual rate of 19.5%, further supporting the case for its premium valuation and underscoring the company’s long-term potential in both commercial aerospace and defense markets.

Should Investors Buy Shares in SAFRY?

Safran offers a rare blend of strong fundamentals, thematic tailwinds, and consistent execution. With rising earnings estimates, top-tier growth potential, and a strategic foothold in both commercial aerospace and defense, SAFRY remains a high-conviction idea, despite its premium valuation. For investors seeking long-term exposure to Europe’s industrial resurgence and defense rearmament, Safran is a name worth owning.

Bear of the Day:

At a time when discount retailers have emerged as market leaders, Target has unfortunately become a notable underperformer. While peers like Walmart and Costco continue to thrive, Target has struggled with stagnant sales, margin pressure, and shifting consumer preferences. These headwinds have weighed heavily on the stock, which is now down roughly 30% year to date and has shown virtually no net return over the past decade.

Adding to the bearish outlook, Target currently holds a Zacks Rank #5 (Strong Sell), reflecting negative earnings estimate revisions and declining analyst sentiment. Technically, the stock has also broken down from a key support level, confirming a bearish pattern that suggests further downside may be ahead.

To be clear, Target remains a well-known and widely trusted brand, with long-term potential to rebound. But for now, with both fundamentals and technicals working against it, investors would be wise to stay on the sidelines until signs of a meaningful turnaround in both in earnings momentum and share price behavior begin to emerge.

Target Stock Falls as Analysts Lower Estimates

The fundamental picture for Target has continued to deteriorate, with analysts sharply lowering their earnings expectations in recent weeks. Current-year EPS estimates have been revised down by 10.9%, while next year’s projections have fallen even further, by 12.2%. These widespread downward revisions reflect weakening confidence in the company’s near-term outlook and reinforce its Zacks Rank #5 (Strong Sell).

Target's top-line growth has also been underwhelming. Sales have remained essentially flat over the past three years, and the outlook going forward is hardly inspiring. Revenues are expected to decline by 1.2% in the coming year before rebounding modestly by just 2.6% the year after—a tepid pace that suggests continued pressure from shifting consumer behavior and growing competition from both value-oriented and e-commerce retailers.

TGT Stock Breaks Down

After spending nearly two months consolidating in a tight range, TGT stock broke down below key support this week, signaling renewed technical weakness.

Interestingly, the initial move lower did not trigger immediate follow-through selling—often a hallmark of stronger breakdowns. This could be a mildly encouraging sign that the selloff may be losing momentum, or that the stock is searching for a new equilibrium.

Still, from a technical standpoint, the trend remains bearish. As long as TGT trades below the $95.60 level, the breakdown is considered valid and the path of least resistance continues to point lower. Without a sustained move back above that former support, now likely acting as resistance, investors should be cautious of further downside pressure.

Should Investors Avoid TGT Stock?

Given the combination of weakening fundamentals, downward earnings revisions, and a bearish technical setup, Target appears to be in a sustained downtrend. While the brand’s long-term potential shouldn’t be dismissed, the near-term risks outweigh the rewards. Until Target shows clear signs of stabilizing both its earnings outlook and stock price, investors are better off looking elsewhere.

Additional content:

Whatever Happened to Pandemic Stocks? Some Are Showing Life Again

A handful of stocks benefited massively during the pandemic. It was an interesting time to be an investor, to say the least, and those who targeted the stay-at-home stocks were rewarded handsomely with considerable gains.

A few of those stocks include Shopify, Zoom Communications and Peloton Interactive. Below is a chart illustrating the performance of each over the last year, with the S&P 500 blended in as a benchmark.

The bunch has quietly outperformed the S&P 500 over the last year, perhaps a surprise to many. Let’s take a closer look at each.

Shopify Stock Keeps Firing

Shopify’s platform gained widespread attention during the period as consumers shifted to online shopping. SHOP shares always felt like the strongest bet out of the ‘pandemic basket’ of stocks, particularly so due to the staying power of online shopping.

And its earnings results have helped reinforce the idea, which have regularly been strong over recent periods. Sales grew 27% year-over-year throughout its latest period, with SHOP posting double-digit percentage YoY sales growth in ten consecutive periods.

Jeff Hoffmeister, CFO, on SHOP’s latest release –

“Q1 marked another very strong set of financial results for Shopify, with 27% revenue growth and 15% free cash flow margin. We have now achieved eight consecutive quarters of pro forma revenue growth of 25% or more and seven consecutive quarters of GMV growth greater than 20%, all while increasing our free cash flow. These metrics highlight our strong performance and dedication to supporting our merchants’ success.”

ZM Sales Remain Weak

Zoom Video Communications’ cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. It’s easy to understand why shares were so beloved during the period, as many were forced onto the platform.

ZM’s sales grew by a modest 3% from the year-ago period in its latest release, with adjusted EPS of $1.43 climbing 6% year-over-year. Its cash-generating abilities took a big hit, with operating cash flow of $489 million down from the $588 million mark in the same period last year. Free cash flow of $463 million compared to $569.7 million in the year-ago quarter.

EPS expectations for its current fiscal year do reflect positivity, with the current $5.36 Zacks Consensus EPS estimate up 5% over the last year. Growth remains muted, though, with the estimate suggesting a 3% pullback year-over-year.

The company needs to see meaningful sales growth to get investors interested again, which it’s largely struggled to achieve.

Can PTON Stock Turn Around?

Peloton shares have been hit the hardest out of the group, down more than 90% since making all-time highs back in January of 2021. Weak quarterly results have continued to drive shares lower over the past year, with PTON again falling short of our consensus estimates in its latest release.

Sales of $624 million in the above-mentioned period fell 13% YoY, with its Subscription revenue also declining 4% from the same period last year. Connected Fitness Products Revenue also decreased 27% year-over-year, driven by lower sales and deliveries across all its Connected Fitness Product categories.

Consumers just haven’t found PTON’s products appealing post-pandemic, resulting in the above sales decline and subscription losses.

Bottom Line

While stocks such as these were all widely hailed during the pandemic, they’ve seemingly been shoved to the back of investors’ minds since.

Shopify has, and remains, the true leader of the group concerning overall performance and fundamentals. The company hasn’t struggled post-pandemic like the others, with the staying power of online shopping driving the positivity.

Zoom has traded sideways for what has felt like forever, with shares in desperate need of a strong quarterly release that reveals meaningful sales growth.

Peloton is currently in a more concerning spot, primarily due to weak sales and an overall uninterested consumer.

Out of the bunch, Shopify shares continue to reflect the most attractive opportunity.

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