This Week, From The Analyst Community

Stock analysts can provide valuable insight into the sentiment around a certain stock or sector and shed some light on what is possible or likely for a stock.  Stirring in the analyst community can sometimes be early signs of stock movement.  Which is why our team reviews dozens of analyst research reports each and every day with the goal of finding new investment ideas for our readers. 

Of the hundred of reports we reference weekly, some stand out among the others for various reasons.  Our team has sifted through this week’s reports and whittled it down to the most pertinent moves.   

Read on for the details on some of the most impactful actions taken by analysts over the past week.   

Monday, February 7th

  • Snowflake (SNOW) was upgraded to Overweight from Neutral at Morgan Stanley with a price target of $390.  Analyst Keith Weiss told investors in a research note, Snowflake’s core data warehousing business is outperforming and its “new nascent” expansion opportunities are “gaining steam” with significant free cash flow generation “within reach.”
  • Citi analyst Eric Lau double downgraded Stanley Black & Decker (SWK) to Sell from Buy and slashed the price target to $145 from $215 citing strong competition amid inflation and supply chain bottlenecks.  Black & Decker’s recent weakness in volume growth, along with massive layoffs are in stark contrast with the performance of Techtronic (TTNDY), the main competitor of SWK.  

Tuesday, February 8th

  • Barclays analyst Jiong Shao initiated coverage of several Chinese EV makers.   Li Auto (LI), Nio (NIO) and XPeng Motors (XPEV) were assigned price targets of $38, $34 and $45, respectively along with Overweight ratings. According to the analyst,  “rapid adoption” of electric vehicles around the world and “booming” sales have presented China’s electric vehicle makers a “rare opportunity” to not only take a sizable market share of the domestic auto market, but also build a dominant position around the world.
  • BTIG analyst Jake Fuller downgraded Airbnb (ABNB) from Buy to Neutral citing concerns over consensus expectations and the sustainability of multiples if estimates are coming down and growth is slowing.  Fuller adds that the post-Omicron expectations for the company are “aggressive”, particularly in Q2, when he sees single-digit bookings growth given a tough comp.  The sustainability of Airbnb’s double-digit revenue multiple is in question at a time when growth stocks in his coverage have pulled back towards a mid-single-digit multiple, the analyst tells investors in a research note.

Wednesday, February 9th

  • AMD (AMD) was upgraded to Buy from Outperform by Daiwa analyst Louis Miscioscia with a price target of $150, up from $140. The analyst cites the recent pullback for the upgrade. In addition, AMD’s prospects are “looking good” for 2022 and 2023, Miscioscia tells investors in a research note, adding that the company is seeing “firm orders and good visibility” in cloud demand for both internal applications and more instances.
  • BofA analyst Koji Ikeda started coverage of Veritone (VERI) with a Buy rating and $22 price target. The company “screens well” on his “4Ms framework” for software investing given its $27B market, differentiated competitive moat, strong management, and margin potential, the analyst tells investors in a research note.
  • JPMorgan analyst Matthew Boss downgraded Big Lots (BIG) to Underweight from Neutral with a price target of $31, down from $54. The analyst sees potential downside risk to estimates with more than 60% of Big Lots’ assortment tied to home-related categories, which he says were notable pandemic and stimulus beneficiaries.  Further, mounting inflationary pressures impact the company’s core low-end consumer, Boss tells investors in a research note.  He also sees potential margin erosion tied to a return of markdowns.

Thursday, February 10th

  • Jefferies analyst Brian Tanquilut downgraded Healthcare Services (HCSG) to Underperform from Hold, lowering the price target to $13.50 from $19, after the company’s fourth quarter earnings per share and EBITDA missed expectations by 57% and 54%, respectively.
  • Citi analyst James Hardiman initiated coverage of Six Flags (SIX) with a Buy rating and $54 price target.  Six Flags is perhaps the best proxy for a theme park industry that offers a “compelling reopening story and an attractive combination of risk and reward,” Hardiman argued.

Friday, February 11th

  • BofA analyst Mihir Bhatia initiated coverage of SoFi Technologies (SOFI) with a Buy rating and $17 price target. The company’s vertically integrated initiatives and member growth are expected to drive strong revenue, the analyst tells investors in a research note, estimating 40% top-line CARG in 2021-2024.
  • BofA analyst Jason Kupferberg upgraded Block (SQ) to Buy from Neutral with a price target of $185, down from $221.  Following the stock’s big underperformance on general growth sell-off and limited visibility, it is now “quite undervalued,” the analyst tells investors in a research note.

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