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 brokerage firms over the past week.   

Monday, March 7th

  • UBS analyst Michael Lasser upgraded Five Below (FIVE) to Buy from Neutral with a price target of $200, down from $215. The recent pullback in the stock has created an “attractive” buying opportunity as shares now trade at 25-times his 2022 earnings per share estimate versus its 35-times average next-twelve-months earnings multiple over the last five years.
  • Argus analyst John Staszak downgraded DraftKings (DKNG) to Hold from Buy. The company is facing increasing competition from MGM (MGM) and Wynn (WYNN) as they expand their online sports betting operations, the analyst told investors in a research note.
  • Seaport Global analyst Daniel McKenzie downgraded American Airlines (AAL) to Neutral from Buy and withdrew his previous price target on the shares, citing “energy market chaos” tied to the Russian/Ukraine war and calling it a “weaker balance sheet story.”

Tuesday, March 8th

  • Jefferies analyst Stephen Volkmann upgraded Caterpillar (CAT) to Buy from Hold with a price target of $260, up from $215. His prior Hold rating had been based on concerns that constrained capex and ESG themes in both mining and oil and gas markets that account for about 40% of Caterpillar revenue would lead to much more modest cyclical growth than in past cycles, but he now believes the Russia/Ukraine crisis has “fundamentally altered global commodity markets” and will likely drive a decade of reinvestment.
  • Canaccord Genuity analyst Jed Dorsheimer initiated coverage of Lion Electric (LEV) with a Buy rating and $12 price target. Lion Electric has a first-mover advantage in the electric vehicle school bus market and the segment’s transition to electrification is gaining momentum, Dorsheimer told investors in a research note.

Wednesday, March 9th

  • Wedbush analyst Michael Pachter upgraded Netflix (NFLX) to Neutral from Underperform with an unchanged price target of $342. The recent share price decline reflects that Netflix investors have begun to appreciate that the company’s “long-term prognosis is as a low growth, extremely profitable enterprise,” Pachter told investors in a research note.
  • Loop Capital analyst Anthony Chukumba upgraded Dollar Tree (DLTR) to Buy from Hold with a price target of $200, up from $140, following the announcement that the company will reconstitute its board of directors, with former Dollar General CEO Rick Dreiling to become Executive Chairman. Piper Sandler analyst Peter Keith also upgraded Dollar Tree to Overweight from Neutral with a price target of $181, up from $157.
  • Bank of America analyst Jason Kupferberg downgraded PayPal (PYPL) to Neutral from Buy with a price target of $107, down from $175. The analyst believes that 2022 will be a “transition year” for the company as it emphasizes growing Average Revenue Per User over net customer adds – a transition that is complicated by the Russia-Ukraine conflict as 28% of its full year 2021 revenue were earned in Europe.
  • Piper Sandler analyst Weston Twigg initiated coverage of Palantir Technologies (PLTR) with an Overweight rating and $15 price target. Palantir is improving its customers’ operational effectiveness by combining software, artificial intelligence and data into “powerful, central IT solutions,” Twigg argued.
  • Langenberg analyst Brian Langenberg initiated coverage of Boeing (BA) with a Buy rating, citing an accelerating commercial aerospace recovery and expectations that international travel returns to 75%-80% of normal by the end of 2022.

Thursday, March 10th

  • Northcoast analyst Jim Sanderson downgraded McDonald’s (MCD) to Neutral from Buy and removed his previous $297 price target, arguing that the company’s closing of operations in Russia and Ukraine will create headwinds to earnings that “could continue for years.”
  • JPMorgan analyst Mark Murphy downgraded Asana (ASAN) to Underweight from Neutral with a price target of $32, down from $66. The combination of slower sales growth with degrading margins “may prompt increasing questions about pull-forward,” efficiency of the company’s spend, and competitive pressures, while investors are pivoting “toward some semblance of reasonable” near-term free cash flow multiples, Murphy told investors in a research note.
  • BTIG analyst Gray Powell upgraded Crowdstrike (CRWD) to Buy from Neutral with a $257 price target. The company reported stronger than expected fourth quarter results and initial fiscal 2023 growth outlook, the analyst noted.

Friday, March 11th

  • Piper Sandler analyst Brent Bracelin downgraded Oracle (ORCL) to Underweight from Neutral with a price target of $70, down from $100, following last night’s results. The analyst finds it difficult to see how a cloud shift can sustain a clear path to double-digit organic growth next year considering more than 70% of revenue is still tied to the traditional Oracle product categories where revenue declined by 1.6% year-over-year this quarter.
  • Oppenheimer analyst George Iwanyc downgraded DocuSign (DOCU) to Perform from Outperform and removed his prior $250 price target after the company reported better than expected Q4 revenue and billings, but gave “disappointing” FY23 revenue guidance below consensus. The guidance shows that challenges in sales execution and resetting post-COVID consumption patterns remain near- to medium-term headwinds, Iwanyc said.
  • Deutsche Bank’s Black initiated coverage of Roblox (RBLX) with a Buy rating and $60 price target. The company is an early leader in the interactive digital creator marketplace, with growing moats and strong network effects, the analyst tells investors in a research note.

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