Small caps last week: Webull risks, Levi’s outlook, Vaxcyte trial success
Webull’s China-based operations put U.S.investors and their data at risk, the U.S. House Select Committee on China has concluded / Photo: Facebook / Webull
Last week, a congressional committee found that trading platform Webull’s ties to China pose risks to U.S. investors and their data. Meanwhile, Levi Strauss reported revenue growth, but its U.S. direct-to-consumer sales disappointed: the company bet on baggy jeans as demand shifted toward low-rise styles. In addition, shares of biotech Vaxcyte soared almost 31% following a successful trial of its pneumococcal vaccine. These stories headline Oninvest’s small-cap recap for the week of October 5-9.
Webull accused of being U.S. national security threat
Trading platform Webull is linked to the Chinese government, posing a national security threat to U.S. finance, the House Select Committee on China concluded, as CNBC reports. Webull had 28 million registered users worldwide and $28.5 billion in customer assets at the end of June, according to company data. Webull stock cratered 19.09% on Wednesday.
The following day, Webull disputed the committee’s findings, stating that U.S. customer data is stored in the U.S. and that access to sensitive information is controlled by U.S.-based employees.
Webull was founded in 2016 by former Alibaba and Xiaomi manager Wang Anquan. According to the committee’s report, which CNBC exclusively obtained, many of the company’s business processes, personnel, and infrastructure are subject to Chinese law, which allows the authorities to compel companies to hand over data.
Vaccine maker Vaxcyte rallies on successful trial
Biotech Vaxcyte reported a successful trial of its vaccine against pneumococcal infections, which can cause a range of serious diseases. The stock soared 30.7% on Monday.
VAX-31 covers 31 pneumococcal serotypes, more than Pfizer’s Prevnar, which protects against 20 bacterial strains, and Merck’s Capvaxive, which covers 21. In the phase III trial, the vaccine met all prespecified primary immunogenicity and safety endpoints.
The company plans to submit an application for approval of VAX-31 in the first half of 2028 and expects results from a mid-stage trial of the vaccine in infants by the middle of next year. Many countries include pneumococcal vaccination in their national immunization schedules.
Following the successful trial, at least two Wall Street analysts raised their target prices on the stock and reiterated their “buy” ratings. According to MarketWatch data, Vaxcyte has nine “buy” ratings versus just a single “hold.” The average target price of $114.80 per share implies 80% upside from the last close.
Levi’s sales slip as fashion trends shift
Denim maker Levi Strauss reported revenue growth of 4% year over year to $1.61 billion for the third quarter of its fiscal 2026. The analyst consensus had called for $1.62 billion, the Wall Street Journal noted.
Shifting fashion trends pushed direct-to-consumer sales down 1% in the U.S. and 2% in Europe during the quarter, falling short of the company’s internal expectations. Its bet on baggy jeans in its back-to-school campaign missed the mark as U.S. demand shifted toward low-rise styles. Tariff refunds supported third-quarter earnings and were also factored into the higher full-year earnings outlook.
The management raised its adjusted earnings-per-share guidance for the full fiscal year to $1.54-1.56 from $1.46-1.52. It also revised its revenue outlook, now expecting full-year growth of 7%, the low end of its previous 7-7.5% range.
Wall Street is upbeat on Levi Strauss stock: 13 analysts have bullish recommendations, while four recommend "hold." The average target price is $26.80 per share, implying around 40% upside from the last close.
Citi upgrades Harley-Davidson
Citi has recommended buying shares of motorcycle maker Harley-Davidson ahead of its quarterly earnings release. The bank upgraded the stock from a "hold"-equivalent rating to “buy” and raised its target price 6.5% to $33 per share, implying 23% upside from the last close.
Citi analyst James Hardiman believes Harley-Davidson’s recovery is gaining momentum after a multiyear sales slump that has sent the stock down 41% since the end of 2022. Citi is encouraged by North American retail sales trends: sales rose 14% year over year in the first quarter and 3% in the second, while September growth may have reached double digits, CNBC reported. Harley-Davidson is expected to report quarterly results on October 29, writes CNBC.
Other analysts have yet to share Citi’s optimism: the stock has nine “hold” ratings versus six “buy” calls. Four analysts recommend "sell." The average target price is $28 per share, 4.5% above the last close.
