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As the U.S. Department of Education ramps up collection efforts on past-due federal student loans, a default wave is coming, new reports show.
Of the 5.8 million newly delinquent borrowers, nearly one-third could reach default status in July, according to TransUnion.
Student loan borrowers who are behind on their payments are also seeing their credit scores tumble.

With the U.S. Department of Education’s “involuntary collections” on federal student loans now underway, millions of borrowers face a “default cliff,” reports show.
A new analysis by TransUnion found that as of April, 31% of student loan borrowers with a payment due are in “late-stage delinquency,” or over 90 days past due on payments. That’s the highest share the credit bureau has ever recorded.

As borrowers face repayment challenges — including questions about their loans and loan servicers as well as confusion over the current status of some income-driven repayment plans — more risk falling into delinquency and eventually defaulting, according to Joshua Trumbull, senior vice president and head of consumer lending at TransUnion.
“We don’t think this represents the ceiling,” Trumbull said. “Defaults will continue to tick higher.”
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Of the 5.8 million delinquent borrowers, nearly one-third, or roughly 1.8 million, could reach default status in July, according to TransUnion. An additional 1 million are estimated to reach default status in August, followed by 2 million more in September.
A borrower enters default status, and is subject to collection actions by the Education Department, once payments are 270 days past due.

A recent study by the Pew Research Center also found an impending “default cliff” or “a coming wave of further student loan defaults — which put borrower financial stability and taxpayer investments at risk.”
“This default wave is expected to begin this fall,” said Brian Denton, an officer on the student loans team at Pew.

Defaulted borrowers at risk of wage garnishment

Student loan collections efforts had largely been on pause since the pandemic began in March 2020, but Trump administration officials have said that taxpayers shouldn’t be on the hook when people don’t repay their education debt.
The move to restart collection activity began last month. “Borrowers who don’t make payments on time will see their credit scores go down, and in some cases their wages automatically garnished,” U.S. Secretary of Education Linda McMahon wrote in a Wall Street Journal op-ed in April.
Wage garnishment could start as soon as June for some borrowers, but those in default will receive a 30-day notice before a portion of their paycheck is withheld, a spokesperson for the Education Department previously told CNBC.

Credit scores sink for past-due borrowers

Meanwhile, consumers who have fallen behind on payments in recent months have seen their credit scores fall by 60 points, on average, TransUnion also found. For super prime borrowers — or those with credit scores above 780 — who were seriously delinquent, scores sank as much as 175 points. Credit scores typically range between 300 and 850.
“Consumers may find themselves shocked by the dramatic and immediate impact that a default can have on their credit scores,” Trumbull said.

The credit score implications are worse for borrowers with better scores, research shows. 
Because borrowers in less-risky credit tiers typically have fewer dings on their credit, any derogatory mark “has the potential to have a significant and jarring impact,” according to TransUnion. In general, the higher your credit score, the better off you are when it comes to getting a loan. 
The Federal Reserve Bank of New York also cautioned in a March report that student loan borrowers who are late on their payments could see their credit scores sink by as much as 171 points. 

Initially, those past-due borrowers benefited from the pandemic-era forbearance on federal student loans, which marked all delinquent loans as current. Median credit scores for student loan borrowers rose by 11 points between the end of 2019 to the end of 2020, the Fed researchers found. However, that relief period officially ended on Sept. 30, 2024.
“We expect to see more than nine million student loan borrowers face substantial declines in credit standing over the first quarter of 2025,” the Fed researchers wrote in a blog post. In May, the New York Fed reported that among borrowers with a payment due, nearly 1 in 4, or 24%, were behind on their student loans in the first quarter.

“Although some of these borrowers may be able to cure their delinquencies,” the Fed researchers said, “the damage to their credit standing will have already been done and will remain on their credit reports for seven years.”
Lower credit scores could result in reduced credit limits, higher interest rates for new loans and overall lower credit access, the researchers also said.
Both VantageScore and FICO reported a drop in average scores starting in February as early- and late-stage credit delinquencies rose sharply, driven by the resumption of student loan reporting. Borrowers who are late on their payments could see their credit scores tank by as much as 129 points, VantageScore reported at the time.

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While the Federal Emergency Management Agency typically provides aid after federally declared natural disasters, it’s not designed to be a replacement for your home insurance policy, says a risk management and insurance professor.
What’s more, the agency itself is facing significant changes.
President Donald Trump said earlier this month that the administration plans to “start phasing [FEMA] out” after hurricane season.

Swannanoa resident Lucy Bickers, who received assistance from FEMA after Hurricane Helene damaged her property, holds a sign in support of the government disaster agency as she waits on the route of visiting U.S. President Donald Trump’s motorcade in Swannanoa, North Carolina, U.S., January 24, 2025. 
Jonathan Drake | Reuters

As the Trump administration moves to wind down the Federal Emergency Management Agency, changes could make it harder for homeowners to recover from a natural disaster, experts say.
That underscores a point insurance experts make: FEMA provides aid for states and individuals in the event of a federally declared natural disaster, but it’s not meant to replace your home insurance policy, according to Charles Nyce, a risk management and insurance professor at Florida State University.

“There’s a lot of different things that FEMA does really well, but one of the things they’re not designed for is to be a replacement for insurance coverage for individuals,” said Nyce.

How FEMA could change

President Donald Trump said in a June 10 press briefing that he plans to “start phasing [FEMA] out” after this year’s hurricane season, which spans from June 1 to November 30.
Trump also said the administration would “give out less money” in disaster aid to states and “give it out directly” from the president’s office: “We’re going to do it much differently.” 
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“Over the next couple of months, we’ll be working on reforms and what FEMA will look like in the future as a different agency as under the Department of Homeland Security,” DHS Secretary Kristi Noem said in the briefing.

Asked about the potential changes, a FEMA spokesperson told CNBC that the agency is “laser focused” on disaster response for this hurricane season and “protecting the American people.”
The Department of Homeland Security proposed to cut $646 million from FEMA’s budget for fiscal year 2026, according to a May letter from the Office of Management and Budget. In April, FEMA announced it was ending a disaster prevention and mitigation grant program, returning $882 million in funding to the Treasury.
Such actions are “reckless,” Sen. Raphael Warnock, D-G.A. wrote in a June 5 letter to Noem.
The administration and DHS “have haphazardly and irresponsibly worked to dismantle the nation’s lead disaster response agency without any workable alternative or sense of direction,” he wrote.

It puts more of an onus on citizens to be prepared.

Charles Nyce
a risk management and insurance professor at Florida State University

“FEMA is not going to be able to operate in the same way that it has in the past,” said Jeremy Porter, head of climate implications at First Street Foundation, a nonprofit research organization focused on climate risk.
He and other experts say that the administration’s proposed changes would put more responsibility on states and municipalities to come up with the financial resources to help individuals recover from natural disasters.

What kinds of aid FEMA provides

While FEMA provides grants and resources to help individuals and municipalities recover from federally declared disasters, the aid is designed to be a supplement for something that’s not covered by your homeowners insurance policy, Nyce said.
The way the agency provides aid to individual homeowners is by giving small grants available for uninsured losses, Nyce said. The money can be used to cover temporary housing for a day or week, for example.
The average payout for individual assistance grants through FEMA was $3,522 from 2010 to 2019, according to a 2024 report by the Brookings Institution, a non-partisan think tank in Washington, D.C.

The agency also offers disaster loans with low interest rates through the Small Business Association, which cover losses not covered by insurance, grants or other resources. According to a FEMA release from earlier this month, interest rates can be as low as 2.688% for homeowners and renters, 4% for businesses and 3.25% for nonprofit organizations, with terms of up to 30 years.
“They’re really designed as a way for people just to have enough money to figure out what their next steps are,” Porter said.
Typically, FEMA will assist a state’s emergency management agency after a disaster, said Nyce. But now, the expectation is that states will take on a large role in disaster recovery.
“With cuts at the federal level for disaster recovery, it’s going to put more of a financial burden on the states to enable recovery,” Nyce said.

‘More of an onus on citizens to be prepared’

It’s uncertain how much and what kind of FEMA natural disaster aid will be available for individuals after the agency goes through changes, experts say.
“It puts more of an onus on citizens to be prepared,” Nyce said.
One way to do that is by taking a closer look at your home insurance coverage. See if you need to make changes to your policy — you want to avoid being underinsured, or risk your insurer paying less than the full claim. You might also need additional coverage, such as flood insurance.

Make sure you have enough supplies to “fend for yourself for a day or two, or three,” Nyce said. That includes dry food, batteries, water and a radio. It’s also smart to collect key financial documents to store in a safe place.
Additionally, if officials in your area are advising residents to evacuate in the face of a disaster, you may want to consider doing so rather than trying to shelter in place at home, he said. 
“It may be more prudent to leave,” Nyce said.  More

Zohran Mamdani, who is now the likely favorite to win the general election in November, promised to freeze rent increases in stabilized units during his campaign.
The New York City mayor has the power to appoint representatives to the regulatory board that oversees rent-controlled apartments.
Flagstar, previously known as New York Community Bancorp, faced pressure last year in part due to its real estate exposure.

New York mayoral candidate, State Rep. Zohran Mamdani (D-NY) speaks to supporters during an election night gathering at The Greats of Craft LIC on June 24, 2025 in the Long Island City neighborhood of the Queens borough in New York City.
Michael M. Santiago | Getty Images

Shares of New York regional bank Flagstar slid nearly 4% on Wednesday after the apparent victory of Zohran Mamdani in the New York City Democratic mayoral primary.
Flagstar is the rebranded name of New York Community Bancorp, which came under pressure in 2024 in part due to its real estate exposure. Former Treasury Secretary Steven Mnuchin led a $1 billion investment into the company in March of that year.

Mamdani, who is now the likely favorite to win the general election in November, promised to freeze rent increases in stabilized units during his campaign. The New York City mayor has the power to appoint representatives to the regulatory board that oversees rent-controlled apartments. A pause on rent increases could hurt the profit profile of multi-family rental properties.

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Flagstar Financial in the past day

The exact impact of such a rent freeze on Flagstar’s books is unclear. Deutsche Bank analyst Bernard von-Gizycki estimated that between $16 billion and $18 billion of the bank’s multi-family loan portfolio would be exposed to New York rent regulations, or about a quarter of bank’s total loan book. Morgan Stanley analyst Manan Gosalia estimated that the number drops to $11 billion to $12 billion when accounting only for buildings where more than half of units are rent-regulated.
However, Barclays analyst Jared Shaw said in a note to clients that current rent regulations are already keeping price hikes below the pace of cost increases, and added “we do not see this prospect as something that would change the investment thesis.” Gosalia said a short-term rent freeze should be “manageable” for Flagstar but a longer-term pause could spur the bank to raise its loan loss reserves.
Office-focused real estate stocks with New York City exposure were also under pressure on Wednesday, with SL Green Realty and Vornado Realty Trust fell 5.7% and 6.7%, respectively. Mamdani has called for a higher corporate tax rate, though as mayor he would have little control over that area of policy.
Mamdani led former New York Gov. Andrew Cuomo after first-round ballots were counted on Tuesday, and Cuomo conceded the race. However, the primary uses a ranked choice voting system, which means that Mamdani will not officially be the Democratic nominee until he surpasses 50% of the vote in a later counting round.

In the general election, Mamdani is expected to face Republican nominee Curtis Sliwa and some independent candidates, including incumbent Mayor Eric Adams.
— CNBC’s Michael Bloom contributed reporting. More

New Medicaid work requirements proposed in Republicans’ “One Big Beautiful Bill Act” may prompt millions of Americans to lose coverage.
Individuals ages 19 to 64 would need to work at least 80 hours per month to be eligible for coverage, unless they qualify for certain exemptions.
Here’s what experts say about the proposal.

American flags are displayed on the lawn of the National Mall with the U.S. Capitol Building in the background on June 2, 2025, in Washington, D.C.
Kevin Carter | Getty Images News | Getty Images

‘Big beautiful’ bill includes Medicaid work requirements

The House and Senate versions of the “big beautiful” bill would impose federal work requirements on Medicaid for the first time.

Per the House and Senate proposals, individuals ages 19 to 64 who apply for Medicaid or who are enrolled through Affordable Care Act expansion group would need to would need to work or participate in qualifying activities for 80 hours per month.
Adults may be exempt if they have dependent children or have qualifying circumstances such as medical conditions; however, “exemptions don’t always work, and people could lose coverage anyway,” Orris said.
Medicaid work requirements proposed in the House bill would cut federal spending by $344 billion over 10 years, representing the legislation’s largest source of Medicaid savings, according to KFF, a nonprofit provider of health policy research.

People protest on the national mall during the Unite for Veterans rally on the National Mall in Washington D.C., on Friday, June 3, 2025.
Dominic Gwinn | Afp | Getty Images

Current law prohibits basing Medicaid eligibility on work requirements or work reporting requirements, according to KFF.  
“Many people on Medicaid, if they’re able to, are already working,” said Robin Rudowitz, director of the program on Medicaid and the uninsured at KFF.
However, some states may implement work requirements if they receive approval through waivers. Georgia is currently the only state with a Medicaid work requirement. “Several” other states have recently submitted waiver requests to put such requirements in place, according to KFF.
Arkansas previously implemented Medicaid work requirements. However, estimates have shown while more people became uninsured because of that policy, there were not meaningful increases in employment, according to Rudowitz.

Senate work requirements would include some parents

The Senate version of the bill introduced a “harsher” take on the work requirements that would apply to some parents, Orris said. The Senate calls for limiting parental exemptions to those with children ages 14 and under, rather than all parents of dependent children as the House proposed.
Individuals who apply for Medicaid coverage would need to meet work and other requirements for one or more consecutive months before they apply. Eligibility redeterminations would be conducted at least twice per year to ensure enrollees still meet those requirements.
The Senate version proposes capping the look-back period for showing compliance with work requirements to three months, which on net may be helpful to people, Orris said.

If an individual is denied coverage or disenrolled because they do not meet the Medicaid work requirements, they would be ineligible for subsidized marketplace coverage.
The Senate bill also allows for a longer timeline for states to comply with the Medicaid work requirements. The chamber’s bill would give states the ability to ask for a good faith waiver that would give them an additional two years to come into compliance with the provision, or until the end of 2028, rather than the end of 2026 in the House version. More

Amid heightened concern about college access and affordability, The Princeton Review ranked colleges by how much financial aid is awarded and how satisfied students are with their packages.
“It’s really not what colleges are charging that matters, it is what actual students and families are paying after scholarships and grants are deducted,” says Robert Franek, The Princeton Review’s editor in chief.
At some schools, the average scholarship given to students with need was more than $70,000 in 2024-25.

The federal student loan system is facing a massive overhaul, which could result in less college aid. But higher education is only getting more expensive.
To bridge the gap, some schools are offering substantial financial aid packages, according to The Princeton Review.

College tuition has surged by 5.6% a year, on average, since 1983, significantly outpacing other household expenses, a recent study by J.P. Morgan Asset Management found.
For the 2024-25 school year, tuition and fees plus room and board for a four-year private college averaged $58,600, up from $56,390 a year earlier, according to the College Board. At four-year, in-state public colleges, it was $24,920, up from $24,080.
And yet, the Trump administration’s budget proposal for fiscal 2026 calls for scaling back financial aid, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as curbing the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.
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“Inflation and cuts in federal and state spending are causing schools to increase tuition, in some cases dramatically,” said Robert Franek, editor in chief of The Princeton Review.

However, “it’s really not what colleges are charging that matters, it is what actual students and families are paying after scholarships and grants are deducted — that’s what students and their parents need to focus on,” Franek said.
Grants are considered the most desirable kind of financial assistance because they typically do not need to be repaid. “Grants are the magic word,” Franek said.

Top 5 private colleges for financial aid

Among the top five private schools on The Princeton Review’s list, the average sticker price — including tuition and fees plus room and board — was around $90,000 in 2024-25. The average scholarship grant awarded to students with need was more than $66,000. 

Williams College
John Greim | LightRocket | Getty Images

1. Williams CollegeLocation: Williamstown, MassachusettsSticker price: $90,750Average need-based scholarship: $74,113Average total out-of-pocket cost: $16,637
2. California Institute of TechnologyLocation: Pasadena, CaliforniaSticker price: $86,181Average need-based scholarship: $71,378Average total out-of-pocket cost: $14,803
3. Yale UniversityLocation: New Haven, ConnecticutSticker price: $87,150Average need-based scholarship: $69,164Average total out-of-pocket cost: $17,986
4. Reed CollegeLocation: Portland, OregonSticker price: $87,010Average need-based scholarship: $50,413Average total out-of-pocket cost: $36,597
5. Pomona CollegeLocation: Claremont, CaliforniaSticker price: $91,134Average need-based scholarship: $67,027Average total out-of-pocket cost: $24,107

Top 5 public colleges for financial aid

Among the five public schools on this list, the average scholarship grant awarded in 2023-24 to students with need was more than $20,000.  

People walk on the campus of the University of North Carolina Chapel Hill on June 29, 2023 in Chapel Hill, North Carolina.
Eros Hoagland | Getty Images

1. University of North Carolina at Chapel HillLocation: Chapel Hill, North CarolinaSticker price (in-state): $24,134Average need-based scholarship: $19,921Average total out-of-pocket cost: $4,213
2. New College of FloridaLocation: Sarasota, FloridaSticker price (in-state): $20,271Average need-based scholarship: $16,483Average total out-of-pocket cost: $3,788
3. University of Michigan, Ann ArborLocation: Ann Arbor, MichiganSticker price (in-state): $34,176Average need-based scholarship: $26,860Average total out-of-pocket cost: $7,316
4. University of VirginiaLocation: Charlottesville, VirginiaSticker price (in-state): $40,313Average need-based scholarship: $27,233Average total out-of-pocket cost: $13,080
5. Truman State UniversityLocation: Kirksville, MissouriSticker price (in-state): $23,076Average need-based scholarship: $10,889Average total out-of-pocket cost: $12,187
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Proposed health-care cuts in the “One Big Beautiful Bill Act” may prompt an estimated 16 million Americans to lose health coverage, according to Congressional Budget Office estimates.
That could push medical debt up by $50 billion, a new report from think tank Third Way finds.
The number of people in families facing medical debt could increase by 5.4 million, with debts increasing by up to $22,800.

The Good Brigade | Digitalvision | Getty Images

Proposed federal spending cuts to health care in Republicans’ “One Big Beautiful Bill Act” may increase some families’ medical debts by as much as $22,800, according to a new report from Third Way, a Washington, D.C.-based think tank.
The Republican budget bill proposes $1.1 trillion in cuts to health care that target both Medicaid and Affordable Care Act coverage. An estimated 16 million people may lose health coverage based on those proposals, the Congressional Budget Office has estimated — 7.8 million who would lose Medicaid and 8.2 million who would lose Affordable Care Act coverage.

Overall, medical debt would increase by $50 billion as a result of the budget bill changes — a 15% rise over today’s $340 billion in unpaid debts, according to Third Way.

‘Medical debt stands in the way of the American Dream’

Health coverage losses would increase the number of people in families with medical debt by 5.4 million, according to Third Way’s report. More than 100 million people currently have medical debt in the U.S., according to KFF.
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An estimated 2.2 million households would have medical debt because of Medicaid coverage losses, while 3.2 million more people would rack up balances due to Affordable Care Act reforms that may prompt coverage losses or higher premiums, according to Third Way.
Without coverage, families may see their medical debts increase by as much as $22,800, according to Third Way’s report. About 87% of households that previously had no medical debt would accumulate an average of $22,800 in balances. Meanwhile, 13% of households may accumulate an additional average of $8,790 in medical debt on top of $13,490 in existing balances.

“That’s going to put people’s dreams back, if they’re hoping to go to college or hoping to have a solid retirement or hoping to buy another house,” said David Kendall, senior fellow for health and fiscal policy at Third Way. “Medical debt stands in the way of the American dream, and we shouldn’t make it worse.”

Health insurance ‘makes a measurable difference’

The White House said proposed federal spending cuts are aimed at eliminating “waste, fraud and abuse” in government programs including Medicaid. The Trump administration has said the “big beautiful” bill is a potential “economic windfall for working and middle-class Americans” through tax cuts, higher wages and higher take-home pay.
In a Monday letter that cites the Third Way report, Sen. Jeff Merkley, D-Ore., ranking member of the Senate Budget Committee, and Democratic Sens. Cory Booker of New Jersey, Chuck Schumer of New York and Ron Wyden of Oregon, urged Republican leaders to reconsider the proposed health-care cuts.

Addressing medical debt is a “national priority” with “bipartisan support,” the senators wrote in a letter to Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La. Currently, 16 states have moved to either cancel medical debt or eliminate medical debts from credit reports, they wrote.
“Medical debt is a complex problem, but having health insurance coverage makes a measurable difference,” the senators wrote.
They pointed to a 2013 study in The New England Journal of Medicine that found Medicaid coverage reduces medical debt rates by 13.28 percentage points. The study, published ahead of state Medicaid expansion under the ACA, looked at the effects of Oregon’s 2008 Medicaid expansion.
Americans with unpaid medical balances may face “dire” consequences, which may include delaying or going without needed care, cutting back on food or other necessities or taking on additional debt, the lawmakers wrote.
In addition to personal setbacks, medical debt also affects consumer spending, which may prevent economic growth, they said.
“If the Republican reconciliation bill passes these drastic health care cuts into law, working class families across America risk going further into medical debt,” the senators wrote.
“It is not too late to stop these cuts,” they wrote. More

Silas Stein | Picture Alliance | Getty Images

The Middle East conflict and macro uncertainty are expected to keep global stock markets volatile, so it would be prudent for investors to ignore short-term noise and pick names with solid growth prospects.
To this end, top Wall Street analysts’ research can be a key consideration for investors who are picking out stocks and seeking names with long-term potential.

Here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Chewy

We start this week with online pet retailer Chewy (CHWY). The company recently delivered solid revenue and earnings for the first quarter of fiscal 2025. However, investors were concerned about some aspects, including the decline in free cash flow.
Reacting to the Q1 FY25 performance, JPMorgan analyst Doug Anmuth increased his price target for CHWY stock to $47 from $36 and reiterated a buy rating, saying that the post-earnings sell-off in the stock seems overdone. TipRanks’ AI analyst has an outperform recommendation on CHWY stock, with a price target of $46.
Anmuth stated that he remains bullish on Chewy stock due to its strong execution, growth in active customers, and profitability ramp. He expects sponsored ads, product mix and fixed cost leverage to drive a multi-year profitability ramp.
“We believe CHWY is capturing share from AMZN/WMT supported by hardgoods, product mix shift, consumables, AutoShip, & efficient marketing, while improving industry trends would be a tailwind,” the analyst said.

Anmuth views Chewy’s full-year revenue outlook as conservative, given that the company is tracking towards the upper half of its guidance range. He highlighted that the 240,000 sequential increase in Q1 2025 Active Customer marked the fourth consecutive quarter of growth. He also pointed out improvements in other metrics like gross additions, reactivations and retention. 
Anmuth ranks No. 42 among more than 9,600 analysts tracked by TipRanks. His ratings have been profitable 65% of the time, delivering an average return of 21.9%. See Chewy Ownership Structure on TipRanks.

Pinterest

Next on this week’s list is social media platform Pinterest (PINS). Recently, the company entered into a partnership with Instacart, under which advertisements on Pinterest will become directly shoppable via Instacart.
Reacting to the collaboration, Bank of America analyst Justin Post reaffirmed a buy rating on PINS with a price target of $41. TipRanks’ AI analyst has assigned an outperform rating on PINS stock, with a price target of $37.
Post said that advertisers can capitalize on Instacart’s first-party purchase data to target Pinterest users. The analyst highlighted that in the initial phase, select brands can reach Pinterest users based on real-world retail purchase behavior captured by Instacart. The second phase will introduce a “closed-loop measurement,” enabling advertisers to see how Pinterest ads lead to product sales across Instacart’s network of over 1,800 retail partners.
Overall, this partnership will provide more precise ad campaign insights and performance tracking. Post noted the rise in PINS stock in reaction to this deal and potentially favorable Q2 ad data. The top-rated analyst thinks that the partnership is a “good fit as CPG [consumer packaged goods] is one of Pinterest’s largest verticals (cooking and recipes also popular), and the closed loop attribution on campaigns will likely be valued by advertisers.”
If successful, Post thinks that the partnership could drive incremental ad spend by CPG clients. He remains constructive on Pinterest due to artificial intelligence (AI) enhancements that seem to be fueling user engagement and improved ad performance, with AI ramp still in the early stage.
Post ranks No.23 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 69% of the time, delivering an average return of 22.9%. See Pinterest Insider Trading Activity on TipRanks.

Uber Technologies

We move to Uber Technologies (UBER), a ride-sharing and delivery platform. Recently, Stifel analyst Mark Kelley initiated a buy rating on UBER stock with a price target of $110. The analyst stated that he views UBER as a “super app” offering multiple reasons to use its platform, like commuting, ordering food and delivery.
Commenting on whether the emergence of autonomous vehicles (AVs) is a risk or opportunity, Kelley said that AVs present minimal risk to Uber’s business over the near-to-medium term due to some hurdles, like safety, clarity on regulatory framework, cost of manufacturing AVs and large investments needed to support an AV fleet. In fact, the analyst thinks that the long-term risk from AVs is also unclear currently due to a wide range of potential outcomes.
Kelley is optimistic that Uber is well-positioned to meet or surpass the financial targets set in 2024, thanks to its solid execution. He expects gross bookings growth of 16% each in 2025 and 2026, supported by continued expansion into non-urban areas and internationally, with persistent adoption of UberOne. Moreover, Kelley expects earnings before interest, taxes, depreciation and amortization growth to be higher than gross bookings and revenue growth in 2025 and 2026.
Finally, Kelley is confident that Uber will eventually be successful in Delivery, which also facilitates customer acquisition, mainly in less dense/non-urban areas. He expects initiatives like Uber One and increased supply to boost Delivery bookings ahead. Kelly is also bullish on the greater retail media sub-segment of digital ads, as Uber has several advantages, like access to location data. Like Kelley, TipRanks’ AI analyst is also bullish on UBER stock, with a price target of $108.
Kelley ranks No.119 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 67% of the time, delivering an average return of 25.3%. See Uber Technologies Statistics and Valuation on TipRanks. More

People pass a Victoria’s Secret store in Manhattan, New York City, on June 5, 2024.
Spencer Platt | Getty Images

Company: Victoria’s Secret & Co (VSCO)
Business: Victoria’s Secret & Co. is a specialty retailer of women’s apparel and beauty products marketed under the Victoria’s Secret, Pink and Adore Me brand names. Victoria’s Secret brand offers intimate apparel, casual sleepwear, swim, lounge and sport, as well as fragrances and body care. Pink is a lifestyle brand for young women providing variety of collections and heritage pieces, including intimate apparel, loungewear, activewear, accessories, beauty and more. Adore Me is a direct-to-consumer lingerie and apparel brand that is focused on serving women of all sizes and budgets.
Stock Market Value: $1.5B ($18.83 per share)

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Victoria’s Secret & Co. in 2025

Activist: Barington Capital

Ownership: > 1%
Average Cost: n/a
Activist Commentary: Barington was founded in 1992 by James A. Mitarotonda as a boutique, full-service investment bank to serve the needs of emerging growth and smaller capitalization companies. The success of the firm and its investments led to the wind-down of the investment bank and the launch of an activist hedge fund in 2000. In its history, Barington has taken material action at 38 other companies and has averaged a 38.18% return on these investments versus 14.74% for the Russell 2000 over the same period.
What’s happening
Barington is advocating for Victoria’s Secret to (i) replace at least a majority, if not all, of the board with directors who have proven experience in brand revitalization, operational execution, international expansion and shareholder value creation (six of the nine current directors have been on the board since its public listing); (ii) have the reconstituted board consider whether CEO Hillary Super has the experience and strategic clarity necessary to engineer a turnaround; (iii) dedicate additional focus to its core brand; (iv) accelerate growth in digital and international markets; and (v) streamline the operating model eliminating underperforming and distracting initiatives.
Behind the scenes
Victoria’s Secret & Co. (“VSCO”) is a specialty retailer of lingerie, clothing and beauty products through its flagship Victoria’s Secret brand, Pink and Adore Me. The company began trading on the New York Stock Exchange in summer 2021 following a spin-off from L Brands (which is now Bath & Body Works). The company’s nearly four-year stint in the public markets has been marked by difficulties. Trading at an all-time high of roughly $76 per share not long after its debut, shares have fallen more than 75% to around $18 per share.

Investor BBRC International PTE Limited converted from a 13G to a 13D in February 2024 and built its position to nearly 13% as VSCO shares continued to tumble. Earlier this month, BBRC sent a letter to Victoria’s Secret Chair Donna James in which it lambasted the board for its history of value destruction. BBRC’s letter is short on support and detail and long on allegation, negativity and second guessing with the benefit of hindsight. The only suggestion the investor makes states the obvious: “constructing a confidence-inspiring Board and generating positive financial returns to drive value creation.” Thankfully for Victoria’s Secret and its shareholders, a more constructive and experienced activist showed up: Barington Capital.
On June 16, Barington sent a letter to the board of VSCO notifying the company of its more than 1% position. Then in its very next paragraph, Barington uses words like “constructively,” “collaboratively” and “helpful.” The firm does not just claim to have industry experience, but cites its engagement with L Brands, the former parent company of VSCO, which led to an increase in the stock price by 221.5% during its tenure as an advisor to the board of directors. Like BBRC, Barington criticizes the company’s dismal underperformance, trailing its peers by 47.4 percentage points since its IPO. But while BBRC was content with just being critical, Barington specifically identifies several reasons for the underperformance such as declining revenue, shrinking gross margins, growing inventory, high senior management turnover, a lack of marketing and merchandising focus and an apparent failure to articulate or execute a compelling brand vision. Had Barington just left it there, the firm would have been more helpful than BBRC. However, as a responsible and experienced shareholder activist, Barington takes it to the next integral step – suggestions on a path forward. Specifically, Barington recommended that Victoria’s Secret: (i) replace at least a majority, if not all, of the board with directors who have proven experience in brand revitalization, operational execution, international expansion and shareholder value creation (six of the nine current directors have been on the board since its public listing); (ii) have the reconstituted board consider whether CEO Hillary Super has the experience and strategic clarity necessary to engineer a turnaround; (iii) dedicate additional focus to its core brand; (iv) accelerate growth in digital and international markets; and (v) streamline the operating model eliminating underperforming and distracting initiatives.
Barington is no stranger to VSCO. In fact, the firm was a vocal proponent of the spin in a previous 2019 campaign at L Brands. At the time, Barington recommended that the company take swift action to improve the performance of VSCO by correcting merchandising mistakes and launching a strategic review to unlock value through a separation of VSCO from Bath & Body Works. The two parties eventually entered into an agreement pursuant to which L Brands appointed Barington as a special advisor to the company, and Barington agreed to withdraw its proposed nominees to the board. Ultimately, VSCO was spun and Barington generated a return of over 221.5% during its tenure as an advisor to the board.
Barington may not be a household name in the investor world like many activists, but it has as much experience as any activist today. The firm’s activism dates back to 2000, and much of it was focused on the retail sector, targeting companies like Hanesbrands, Chico’s FAS and Dillard’s. Of its 46 campaigns, 19 have been at consumer discretionary companies, at which the firm has had an average return of 13.86% versus 8.56% for the Russell 2000 over the same period. Barington does not like spending what it takes to win a proxy fight, preferring to gain representation through settlements. Its recent proxy fight and loss at Matthews International was evidence of this, but also showed that Barington is still willing to take a proxy fight to the distance. Barington is not likely to go through that again so soon, but given its experience in this industry and at Victoria’s Secret (two of the current directors, including Chair Donna James, were directors when Barington successfully collaboratively engaged in 2019), we would expect that the firm would have a good opportunity to work constructively and amicably with the board to create shareholder value.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More