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, July 25th

  • MoffettNathanson analyst Clay Griffin upgraded Activision Blizzard (ATVI) to Outperform from Market Perform with an unchanged price target of $95. The merger arb spread has been wide ever since Microsoft (MSFT) agreed to buy Activision for $95 per share, noted Griffin, who would push back on the “notion that Microsoft will be closing on Activision any day now,” but sees “strong rationale for why it ultimately should.”
  • Raymond James analyst C. Gregory Peters upgraded Travelers (TRV) to Strong Buy from Market Perform with an $185 price target. The stock has outperformed year-to-date, and Peters believes Travelers could be positioned to continue outperforming on a relative basis considering the stock’s current valuation is attractive relative to its 5-year average and peers.
  • Morgan Stanley analyst Brian Nowak double downgraded Snap (SNAP) to Underweight from Overweight with a price target of $8, down from $17. The analyst argued that Snap’s “disappointing” second quarter results, third quarter trends to date and its company-specific challenges leave him more cautious about its forward revenue and profit outlook. Wolfe Research analyst Deepak Mathivanan also downgraded Snap to Peer Perform from Outperform. The analyst has a lack of conviction in forward estimates following the company’s second quarter results.
  • Macquarie analyst Frederick Havemeyer downgraded Twilio (TWLO), Pegasystems (PEGA) and 2U (TWOU), all to Neutral from Outperform, with price targets of $96, $54 and $11, respectively, as he made “deep cuts” to his calendar year 2023 and 2024 forecasts to reset expectations for macro risks and model in a likely recession.

Tuesday, July 26th

  • OTR Global upgraded NetApp (NTAP) to Positive from Mixed following checks with channel partners in North America and EMEA that pointed to market share gains during fiscal first quarter.
  • Goldman Sachs analyst Brett Feldman double downgraded Paramount (PARA) to Sell from Buy with a price target of $20, down from $37. Macro headwinds are likely to intensify pressures on Paramount’s EBITDA and free cash flow through at least 2023, which increases the risk that the company will be able to execute its streaming strategy in a market that is already seeing intensified competition, Feldman contended.
  • Jefferies analyst Brent Thill downgraded MicroStrategy (MSTR) to Underperform from Hold with an unchanged price target of $180. The company’s bitcoin investment is still losing money, down 25% despite the recent run up in crypto, Thill told investors in a research note.
  • Wolfe Research analyst Peter Supino downgraded Roku (ROKU) to Underperform from Peer Perform with a $77 price target. The company’s net subscriber additions and average revenue per user are “face mounting challenges,” Supino told investors in a research note. Meanwhile, Raymond James analyst Aaron Kessler initiated coverage of Roku with a Market Perform rating and no price target.

Wednesday, July 27th

  • Benchmark analyst Douglas Becker upgraded Schlumberger (SLB) to Buy from Hold with a $55 price target, driven by a positive inflection point in international producer spending and activity and his expectation for the company to hit its 25% EBITDA margin target one quarter early in the third quarter of 2023.
  • Raymond James analyst Mitch Ingles upgraded Carvana (CVNA) to Market Perform from Underperform without a price target ahead of the second quarter report on August 4. Ingles believes current valuations levels appear more balanced today following a 40% decrease in share price since May 10.
  • Deutsche Bank analyst Brian Mullan downgraded McDonald’s (MCD) to Hold from Buy with a price target of $259, down from $263. The analyst believes inflationary pressures will limit further upside potential in the shares.
  • Bank of America analyst Heather Balsky downgraded TransUnion (TRU) to Neutral from Buy with a price target of $86, down from $119, citing both lower estimates and a lower multiple given greater macro risks.

Thursday, July 28th

  • Scotiabank analyst Maher Yaghi upgraded T-Mobile (TMUS) to Outperform from Sector Perform with a price target of $167, up from $153. Yaghi expects T-Mobile to outgrow wireless peers and notes that the company is also seeing significant uptake in fixed wireless and mobile/internet bundling.
  • Edward Jones analyst Logan Purk upgraded Qualcomm (QCOM) to Buy from Hold, citing his belief that the stock does not fully reflect the growth outlook for “the industry leader in 5G technology.”
  • R5 Capital analyst Scott Mushkin downgraded Best Buy (BBY) to Sell from Buy with a price target of $62, down from $107, after the company lowered guidance. Jefferies analyst Jonathan Matuszewski also downgraded Best Buy to Hold from Buy with a price target of $71, down from $106.
  • Goldman Sachs analyst Nathan Rich double downgraded Align Technology (ALGN) to Sell from Buy with a price target of $250, down from $380, based on reduced estimates and lower target multiples that reflect a more cautious view on Align’s long-term growth and margin opportunity.
  • Barclays analyst Steve Valiquette reinstated coverage of Centene (CNC) with an Overweight rating and $107 price target following second quarter earnings and PANTHERx divestiture closing.

Friday, July 29th

  • Oppenheimer analyst Colin Rusch upgraded First Solar (FSLR) to Outperform from Perform with a $116 price target. First Solar reported mixed results for Q2 as cost, logistic, and currency headwinds impacted operating results, but the company was able to complete the sale of its project business and book 10GW since its last conference call, Rusch tells investors in a research note.
  • JPMorgan analyst Jamie Baker double downgraded Spirit Airlines (SAVE) to Underweight from Overweight with a price target of $29, down from $30. “Significant patience is required” regarding the takeover by JetBlue Airways (JBLU), Baker tells investors in a research note.

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