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, June 6th
- Wells Fargo analyst Ned Baramov downgraded Sunoco LP (SUN) to Underweight from Equal Weight with a price target of $41, down from $46. While the demand elasticity threshold of $4.50 is not exact, and fuel distribution volumes/margins could in theory continue unabated even at higher gasoline prices, the analyst believes the risk-reward is unfavorably skewed at current levels.
- Morgan Stanley analyst Kimberly Greenberger downgraded American Eagle (AEO) to Underweight from Equal Weight with a price target of $8, down from $22. The company cut its 2022 guidance “significantly as its optimism proved excessive,” said the analyst, who sees room for further material downside as the second half of 2022 guide “appears unachievable.”
- Argus analyst Kevin Heal downgraded Rocket Companies (RKT) to Hold from Buy. The analyst cited “significantly higher” mortgage rates as 30-year fixed rate moved above 5% and is expected to remain elevated in light of the well-publicized accelerated rate hikes by the Federal Reserve, adding that the company’s origination volumes are expected to drop 50% from 2021 levels.
Tuesday, June 7th
- tlantic Equities analyst James Mainwaring downgraded Medtronic (MDT) to Neutral from Overweight with a price target of $105, down from $125. The company “continues to be stuck in a negative earnings revision cycle” following the fourth quarter miss despite management trying to set conservative guidance in recent quarters, Mainwaring told investors in a research note.
- JMP Securities analyst Nicholas Jones initiated coverage of Etsy (ETSY) with an Outperform rating with an unchanged price target of $125. The analyst views its increase in brand awareness “as lasting as opposed to transitory” and sees plenty of opportunity for the company to continue driving volume growth. The analyst also assumed coverage of Amazon.com (AMZN) with an Outperform rating and price target of $3,450, down from $3,600.
- JMP Securities analyst Nicholas Jones resumed coverage of eBay (EBAY) with a Market Perform rating and no price target. The analyst views eBay’s strategic focus on enthusiasts and focus categories favorably, but looks for near-term trends at the company to begin moving toward its long-term vision to become more positive on the name.
Wednesday, June 8th
- BofA analyst Robert Ohmes downgraded Target (TGT) to Neutral from Buy with a price target of $165, down from $235, following yesterday’s guidance cut. The analyst incorporated a lower gross margin outlook for both fiscal Q2 and the second half of the year.
- Wedbush analyst David Chiaverini initiated coverage of Affirm (AFRM) with an Underperform rating and $15 price target, which represents about 40% downside. While he points to several aspects of the Affirm story that he likes, such as its “compelling” value proposition to consumers and merchants and its execution in driving growth in merchant relationships, he is concerned about Affirm’s path to GAAP profitability, increasing competition in the “buy now, pay later” space, forecasts for slowing e-commerce sales and its ability to cover its cost of capital given increased funding costs, Chiaverini tells investors.
- Piper Sandler analyst Kashy Harrison assumed coverage of Plug Power (PLUG) with a Neutral rating and $18 price target. The analyst expects the company to generate over $3B of revenue by 2025, primarily due to material handling, electrolyzers, and green hydrogen fuel sales.
Thursday, June 9th
- JPMorgan analyst David Karnovsky upgraded Take-Two Interactive (TTWO) to Overweight from Neutral with a price target of $175, down from $205, following a period of restriction. With the close of the Zynga acquisition, Take-Two now offers a scaled portfolio of mobile games, in addition to leading PC/console intellectual property and a pipeline of content set to “ramp significantly,” Karnovsky tells investors in a research note.
- RBC Capital analyst Steven Shemesh upgraded Ollie’s Bargain Outlet (OLLI) to Outperform from Sector Perform with a price target of $65, up from $47. The company posted another tough quarter, but between the easing of supply chain pressures and contracted freight rates, its fundamentals will sequentially improve in the back half of the year and beyond, Shemesh tells investors in a research note.
- JMP Securities analyst Nicholas Jones assumed coverage of Zillow Group (ZG) with a Market Perform rating as part of a broader research note on Internet & Digital Media. The company’s Flex Agent should drive incremental market share gains and Zillow also has a large opportunity to harvest more of its category-leading funnel, the analyst tells investors in a research note.
- Susquehanna analyst Christopher Stathoulopoulos initiated coverage of Royal Caribbean (RCL) with a Positive rating and $70 price target. The cruise industry, which has been one of the hardest hit travel industry sub-sectors during the pandemic, is on the mend and have a line of sight to profitability into 2023, said Stathoulopoulos.
Friday, June 10th
- JPMorgan analyst Jamie Baker upgraded Spirit Airlines (SAVE) to Overweight from Neutral with a price target of $30, up from $24. The analyst also named Spirit a “tactical trade idea.” Baker believes “some merger involving Spirit is a high probability outcome.” A merger outcome between Spirit and JetBlue (JBLU) is a growing probability and may overtake the likelihood of a Frontier (ULCC) deal, Baker tells investors in a research note.
- Goldman Sachs analyst Eric Sheridan downgraded Netflix (NFLX) to Sell from Neutral with a price target of $186, down from $265. The analyst has concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends, margin expansion, and levels of content spend. Sheridan also downgraded Roblox (RBLX), eBay (EBAY), and Frontdoor (FTDR).
- Goldman Sachs analyst Eric Sheridan reinstated coverage of Take-Two (TTWO) with a Neutral rating and $136 price target. Following its acquisition of Zynga (ZNGA), the company has gained access to a developer and distributor of social mobile games and should be able to continue its progression as a leading developer of gaming IP across a wider array of distribution modes, the analyst tells investors in a research note.
