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.   

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Monday, June 27th

• Needham analyst Anna Andreeva upgraded Chewy (CHWY) to Buy from Hold with a $55 price target. The company beat expectations in the first quarter and the positive momentum continued into the second quarter as the pet category is “inelastic” and “rational” with price increases sticking and supply chain improving, Andreeva told investors in a research note.
• Goldman Sachs analyst Kate McShane upgraded AutoZone (AZO) to Buy from Neutral with a price target of $2,296, up from $1,969. The analyst views the company as defensively positioned in the current environment saying the majority of auto part sales are non-discretionary.
• Goldman Sachs analyst Will Nance downgraded Coinbase (COIN) to Sell from Neutral with a price target of $45, down from $70. The analyst believes current crypto asset levels and trading volumes imply “further degradation” in Coinbase’s revenue base, which he sees falling 61% year-over-year in 2022 and 73% in the back half of the year.
• Credit Suisse analyst John Roberts initiated coverage of Albemarle (ALB) with an Underperform rating and $185 price target as spot lithium prices are up 150% year-to-date to $50k/ton and now well above the high end of the cash cost curve, and even above reinvestment prices. In his view, this makes further price gains highly speculative. The analyst also started coverage of Celanese (CE) and LyondellBasell (LYB) with Underperform ratings.

Tuesday, June 28th

• Jefferies analyst Brent Thill upgraded Snowflake (SNOW) to Buy from Hold with a price target of $200, up from $125. The analyst cited the “meaningful multiple compression” over the past few months in the shares as well as the company’s continued execution on its platform expansion story for the upgrade.
• Compass Point analyst Chase White upgraded Riot Blockchain (RIOT) to Buy from Neutral with a price target of $14, down from $30, after updating his estimates for the crypto miners in his coverage based on his revised Bitcoin price and global hash rate forecasts.
• UBS analyst Kunal Madhukar downgraded eBay (EBAY) to Neutral from Buy with a price target of $48, down from $60. The company’s non-focus categories are declining and while its Focus categories are doing better, they comprise “purely discretionary spend” that could be disproportionately impacted in a downturn, the analyst told investors in a research note.
• JMP Securities analyst Jordan Bender initiated coverage of DraftKings (DKNG) with an Outperform rating and $25 price target. The analyst believes the shares will see a positive re-rating as the company approaches profitability. Bender also started coverage of Penn National (PENN), MGM Resorts (MGM), Rush Street Interactive (RSI), Golden Entertainment (GDEN) and Flutter Entertainment (PDYPY) with Outperform ratings, and Bally’s (BALY) with a Market Perform.

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Wednesday, June 29th

• Raymond James analyst Olivia Tong upgraded Ulta Beauty (ULTA) to Strong Buy from Outperform with a price target of $485, up from $475, citing a prioritization of companies in her beauty, personal care and household products coverage with diverse portfolios at a wide range of price points that can better withstand trade-down and greater exposure to upper-income consumers who can better absorb higher costs.
• Morgan Stanley analyst James Faucette downgraded Upstart (UPST) to Underweight from Equal Weight with a price target of $19, down from $88. The analyst says the company’s “deteriorating” relative underwriting performance and increasing required returns from institutional partners have shifted his view to “incrementally negative.” He sees downside risk to estimates and valuation as Upstart’s platform’s cyclicality is tested.
• Redburn analyst Alex Haissl initiated coverage of Amazon.com (AMZN) with a Buy rating and $270 price target, citing his view that Amazon Web Services, or AWS, is worth $3T, or “almost 3x Amazon’s current market cap.”
• Redburn analyst Alex Haissl initiated coverage of Microsoft (MSFT) with a Buy rating and $370 price target. Azure is “a key part of Microsoft’s positive equity story” that is worth $1T, but it is “a technology laggard” compared to Amazon’s AWS and Google’s (GOOGL) GCP, Haissl tells investors. Despite Azure’s deficits, he thinks the market underestimates long-term growth for infrastructure providers and that a $1T value for the cloud unit is not priced in Microsoft’s current valuation.

Thursday, June 30th

• Credit Suisse analyst Andrew Kuske upgraded Brookfield Infrastructure Partners (BIP) to Outperform from Neutral with an unchanged price target of $49.50. Brookfield Infrastructure Partners is positioned to benefit from “rather positive potential across a variety of activities,” including an “abundance” of prospective deployment opportunities, positive fundraising activities across the Brookfield Asset Management franchise and a selection of capital recycling opportunities, Kuske told investors in a research note.
• Northland analyst Gus Richard upgraded AMD (AMD) to Outperform from Market Perform with a price target of $95, down from $97. While he is reducing his estimates for PC CPUs, GPUs, Xilinx and gaming consoles to account for a global recession, cutting $2.8B out of his calendar 2023 forecast, he notes that AMD shares have already seen “significant” multiple compression.
• Roth Capital analyst Sean McGowan initiated coverage of MGP Ingredients (MGPI) with a Buy rating and $115 price target. The diversified producer of distilled spirits and other alcohol and food products has grown sales and EBITDA rapidly in recent years, and the analyst expects strong growth to continue.
• KeyBanc analyst Tyler Parker initiated coverage of AppLovin (APP) with an Overweight rating and $55 price target. As the most scaled solution, with increasing capabilities, the analyst sees opportunity for AppLovin to sustain healthy growth and expand margins at a depressed multiple. The analyst also started coverage of ironSource (IS) with an Overweight rating and a price target of $3.50.
• Jefferies analyst Linda Tsai downgraded Simon Property (SPG) to Hold from Buy with a price target of $100, down from $160, citing weaker pricing power, longer duration leases, and/or structural headwinds. The analyst and her REITs team also downgraded Acadia Realty Trust (AKR), Kite Realty Group (KRG), RPT Realty (RPT) to Hold from Buy, and Brixmor (BRX) to Underperform from Hold.

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Friday, July 1st

• Jefferies analyst Giacomo Romeo upgraded TotalEnergies (TTE) to Buy from Hold with a price target of EUR 60, up from EUR 51. The company, along with BP (BP), should be able to increase the size of its quarterly buybacks by 50%, Romeo tells investors
• Atlantic Equities analyst John Heagerty upgraded First Republic (FRC) to Overweight from Neutral with a price target of $188, down from $210, telling investors that his analyses of the last Fed rate-tightening cycle indicate that First Republic should continue to perform strongly over the next few years.
• BofA analyst Vivek Arya downgraded Micron (MU) to Neutral from Buy with a price target of $62, down from $70, following the company’s quarterly report. The company’s below-consensus Q4 guidance reflected weak consumer demand, China lockdowns that accounted for nearly half of the miss, and slower enterprise sales as downstream customers were constrained by other components, Arya noted.
• Berenberg analyst William Howard downgraded FedEx (FDX) to Hold from Buy with a price target of $275, down from $333. The stock has had “something of a reprieve in the past few weeks, after the company changed its CEO and the apparent influence of an activist investor prompted some strategy changes,” said Howard. However, with near-term earnings risks “now mounting and mixed prospects for the execution of the strategic review,” the shares may “pause for breath until the macroeconomic outlook becomes clearer,” in the view of the analyst.

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