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.  Stirrings 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 hundreds 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, May 23rd

  • Morgan Stanley analyst Erik Lapinski upgraded Zebra Technologies (ZBRA) to Equal Weight from Underweight with a price target of $335, down from $400, as he assumed lead coverage of the stock from Meta Marshall. The stock’s valuation has reset and it is now trading at a multiple in-line with five-year averages while more realistic growth expectations have been built in, making the risk-reward more balanced and turning the debate to Zebra’s earnings trajectory, Lapinski told investors.
  • Citi analyst Paul Lejuez downgraded Under Armour (UAA), Ralph Lauren (RL), Kohl’s (KSS), Abercrombie & Fitch (ANF) and American Eagle (AEO) to Neutral from Buy, and cut Gap (GPS), Children’s Place (PLCE) and Carter’s (CRI) ratings to Sell from Neutral. Last week’s earnings reports represented “a wake-up call for retail that showed the stars are now misaligned” for fiscal 2022, Lejuez told investors in a research note.
  • Atlantic Equities analyst Oliver Holmes initiated coverage of Wabtec (WAB) with an Overweight rating and $101 price target. The analyst believes long-term structural drivers are expected to support a doubling of freight and passenger rail activity by 2050, and thinks Wabtec is “well positioned to capitalize” on this growth.

Tuesday, May 24th

  • Rosenblatt analyst Blair Abernethy upgraded Snowflake (SNOW) to Buy from Neutral with a price target of $255, down from $325, ahead of the company’s fiscal first quarter results on May 25. The analyst expects Snowflake to meet or marginally exceed his Q1 product revenue growth estimate of 81% year-over-year given ongoing enterprise digital transformation momentum.
  • Atlantic Equities analyst Kunaal Malde downgraded Roblox (RBLX) to Neutral from Overweight with a price target of $30, down from $60. Weakening app download trends suggest engagement could continue to soften in core markets in the near-term, Malde told investors in a research note.
  • Barclays analyst Julian Mitchell downgraded Eaton (ETN) to Underweight from Equal Weight with a price target of $120, down from $145. The analyst is shifting preferences in the multi-industry sector and says Eaton screens among the least attractive in a recession.

Wednesday, May 25th

  • Mizuho analyst Vikram Malhotra upgraded Sabra Health Care (SBRA) to Buy from Neutral with a price target of $15, down from $16, which implies over 12% upside. The analyst sees a “tactically opportunity time” to the upgrade with negatives for skilled nursing now well-known.
  • Barclays analyst Jeanine Wai upgraded Diamondback Energy (FANG) to Overweight from Equal Weight with a price target of $160, down from $162. The analyst views the first quarter as the “clearing event” the stock needed since the company’s cash returns will increase in the second half of 2022.
  • Oppenheimer analyst Owen Lau upgraded CME Group (CME) to Outperform from Perform with a $223 price target. The analyst sees an attractive valuation at current share levels and says rising interest rates bode well for CME’s interest rate franchise.
  • Northland analyst Donovan Schafer initiated coverage of Generac (GNRC) with an Outperform rating and $370 price target. Generac “dominates” the growing U.S. home standby market with about 75% market share and “enduring competitive advantages,” while it is ideally positioned to understand and navigate the terrain of the energy transition to get the most out of its burgeoning clean energy business, Schafer told investors.

Thursday, May 26th

  • Morgan Stanley analyst Kimberly Greenberger upgraded Lululemon Athletica (LULU) to Overweight from Equal Weight with a price target of $303, down from $339. The stock trades at a discount versus history due to growth deceleration and recession fears, but these risks seem priced in and the business could be more resilient thru the headwinds than the market discounts, the analyst contended.
  • Evercore ISI analyst Jonathan Chappell downgraded Union Pacific (UNP) to In Line from Outperform with a $245 price target, citing recent relative outperformance to U.S. rails, second quarter volume shortfalls, and what he sees as a likely-to-be lower guidance reset.
  • Cowen analyst Stephen Glagola initiated coverage of Coinbase (COIN) with an Outperform rating and $85 price target in a note to investors partially titled “Built To Last.” The analyst believes it can grow at a double-digit percentage compound annual growth rate for “the foreseeable future” and argues that its security infrastructure and regulatory adherence are a structural advantage over global competitors.

Friday, May 27th

  • Jefferies analyst Stephanie Wissink upgraded Ulta Beauty (ULTA) to Buy from Hold with a price target of $475, up from $400. With about 45% of Ulta’s business tied to make-up, she had been waiting on the “all clear” suggesting demand had returned to pre-pandemic levels with improving and sustained momentum and the earnings report last night gave her the “signal we’d been waiting for,” Wissink tells investors.
  • Morgan Stanley analyst Kimberly Greenberger downgraded Gap (GPS) to Underweight from Equal Weight with a price target of $8, down from $13, following the Q1 miss. “Consistent mis-execution” and a likely decelerating macro environment leaves room for further negative revisions, Greenberger tells investors in a research note. JPMorgan analyst Matthew Boss also downgraded Gap to Underweight from Neutral with a $9 price target.
  • Stifel analyst Craig Jones initiated coverage of Oak Street Health (OSH) with a Buy rating and $25 price target. Oak Street Health is a fully at-risk primary care provider network serving the Medicare market, meaning that it is in charge of providing a member primary care and is also financially at risk for a patient’s health insurance, Jones tells investors.

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