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. 

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 analysts over the past week.   

Monday, August 22nd

  • CFRA analyst Kenneth Leon downgraded Netflix (NFLX) to Sell from Hold with a price target of $238, down from $245. The analyst believes the shares may underperform the S&P 500 Index for the remainder of the year after rallying 40% off the mid-July lows.
  • Evercore ISI analyst Jonathan Chappell downgraded UPS (UPS) to In Line from Outperform with a $214 price target. As a “global enterprise with significant exposure to the consumer economy,” the uncertain macro backdrop, especially related to consumer spending, provides “further questions about” a recovery in both domestic and international volumes and could pressure earnings estimates for the second half of 2022 and 2023, Chappell told investors in a research note.
  • RBC Capital analyst Rishi Jaluria downgraded DocuSign (DOCU) to Sector Perform from Outperform with a price target of $65, down from $80. The analyst believes DocuSign’s short-term outlook appears “challenging,” particularly as the company looks for a new CEO.

Tuesday, August 23rd

  • BTIG analyst Matt VanVliet downgraded Zoom Video (ZM) to Neutral from Buy without a price target the company’s second quarter results. The report was “muted” with sales coming in below expectations as currency and online overshadowed another solid enterprise quarter, even while margins and earnings were well above Street estimates, VanVliet told investors in a research note.
  • Macquarie analyst Esme Pau initiated coverage of Baidu (BIDU) with an Outperform rating and $188 price target. The analyst expects the online advertising segment to serve as Baidu’s core profit engine and sees an online advertising recovery in the first quarter of 2023 as the primary share price catalyst.
  • Argus analyst Taylor Conrad initiated coverage of AutoNation (AN) with a Buy rating and $150 price target. The company is well positioned for the future of car buying with an omnichannel approach that integrates online with in-store purchasing and also gives customers the ability to buy a car on their own terms, the analyst told investors in a research note.

Wednesday, August 24th

  • BofA analyst Joshua Dennerlein upgraded Essential Properties Realty Trust (EPRT) to Buy from Neutral with an unchanged price target of $27. The shares underperformed year-to-date and the company’s recent equity raise eliminates equity funding risk during a period of volatile equity capital markets, Dennerlein argued.
  • Rosenblatt analyst Barton Crockett downgraded Twitter (TWTR) to Neutral from Buy with a price target of $37, down from $52. The whistleblower complaint from Peiter “Mudge” Zatko compels the analyst to step back from his formerly bullish stance on the Elon Musk deal, Crockett told investors in a research note.
  • JMP Securities analyst Mitch Germain initiated coverage of VICI Properties (VICI) with an Outperform rating and $38 price target. The company’s strategy has been “stress tested,” as its rents were fully collected during the pandemic, Germain notes.

Thursday, August 25th

  • Erste Group analyst Hans Engel upgraded Costco (COST) to Buy from Hold. Costco Wholesale is showing strong sales growth, has been able to increase its key profitability ratios in recent quarters and the outlook for continued sales and profit growth is good, Engel argued.
  • Piper Sandler analyst James Fish initiated coverage of Nice (NICE) with a Neutral rating and $236 price target. The company should benefit from the conversion of on-premise to cloud seats and shareholder value should be created by a potential split/spinoff of the FCC business, but current trends suggest Nice’s win-rates and net-new business have come down, and the cloud business model transition impact is slowing, the analyst argued.
  • BofA analyst Julien Dumoulin-Smith resumed coverage of Bloom Energy (BE) with a Buy rating with an unchanged price target of $34 following a 15M share equity raise.

Friday, August 26th

  • BofA analyst Julien Dumoulin-Smith upgraded First Solar (FSLR) to Buy from Neutral with a price target of $141, up from $104.50. When he last refreshed his view on First Solar days after the initial Inflation Reduction Act, or IRA, announcement, he did not yet appreciate the magnitude of IRA credits that will accrue to the company, Dumoulin-Smith tells investors.
  • Wells Fargo analyst Stephen Baxter downgraded Centene (CNC) to Equal Weight from Overweight with a price target of $99, down from $103. The California Department of Health Care Services announced contract awards for the state’s Medicaid Managed Care program yesterday and they represent a “near worst case” for Centene, Baxter tells investors in a research note.
  • Daiwa analyst Jairam Nathan downgraded Union Pacific (UNP) to Neutral from Outperform with a price target of $242, up from $235. The analyst sees a “full” valuation at current share levels and limited earnings upside potential. He is encouraged by Union Pacific’s enhanced visibility on wages and improving operating metrics, but sees “pricing and soft economy as risks to earnings growth.”
  • Morgan Stanley analyst Alex Straton assumed coverage of Gap (GPS) with an Underweight rating and a price target of $8, up from $7.50, noting that the company’s Q2 EPS came in “slightly better-than-expected against lowered guidance.” While the stock was up 8% in after-hours trading, he thinks the gains “likely don’t last” given that the company has no permanent CEO, its “jewel divisions” are under pressure, and the market has set a “potentially aggressive” EPS bar for FY23, Straton tells investors.

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