This Week, From The Analyst Community

Monday, November 29th

• Morgan Stanley analyst Matthew Harrison upgraded Adagio Therapeutics (ADGI) from Equal Weight to Overweight, raising the price target from $33 t $49, citing evidence that the omicron variant has a higher transmissibility than previous variants which should increase demand for antibodies which can neutralize the variant, but current leading antibodies, including those from Eli Lilly (LLY) and Regenron (REGN), are compromised by omicron, according to Harrison.  However, Adagio’s ADG20 remains highly effective at neutralizing omicron and also possesses other “preferable characteristics,” including coverage of multiple variants, Harrison tells investors.  He has added 4M doses of government stockpiling for Adagio’s ADG20 in 2022 to his projections and now forecasts about $1.8B in sales, Harrison noted.   ADGI share price gained 30% this week.

Tuesday, November 30th

• HSBC analyst Jeremy Fialko initiated coverage of Beyond Meat (BYND) with a Reduce rating and a $62 price target, 16% lower than the last price.  Although Beyond Meat has a quality product, the “highly fragmented and increasingly competitive” meat protein market will make growth harder to come by, leading to below-consensus revenue, Fialko tells investors in a research note.  The analyst believes achieving price parity with comparable meat products “also looks a formidable challenge without compromising profitability.” 

• Dollar Tree (DLTR) was downgraded to Neutral from Buy at Goldman Sachs.  Analyst Kate McShane cited three reasons for the negative revision: an expected shift by the low-end consumer to focus on essentials while the company’s initiatives are largely focused on discretionary expansion; the fact that traffic continues to decline at both of the company’s banners despite lapping easy comparisons; and a view that shares are trading at a full valuation.

Wednesday, December 1st

• Gordon Haskett analyst Robert Mollins upgraded DoorDash (DASH) to Buy from Hold with a $217 price target.  With share price down more than 20% since his November 9th downgrade, he now sees a compelling re-entry point, ”especially against the backdrop of the omicron variant,” which Mollins thinks could drive an increase in consumer aversion to dining out in the near-term.

• Baird analyst David George upgraded Capital One (COF) to Neutral from Underperform.  Card stocks have meaningfully lagged financials overall since the Q3 earnings season, and the risk/reward of Capital One is now more balanced in the low $140s, George tells investors in a research note.  The analyst cites the recent underperformance of the shares for the upgrade to Neutral.

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Thursday, December 2nd

• UBS analyst Kunal Madhukar initiated coverage of Amazon.com (AMZN) with a Buy rating and $4,700 price target.  Amazon is the analyst’s favorite name in the U.S. internet sector.  According to the Madhukar AMZN could see a multiple re-rating on positive estimate revisions for retail and Web Services as consensus revenue estimates are too conservative.  Further, Amazon has “multiple levers” to drive margins, Madhukar tells investors in a research note.

• Piper Sandler analyst Rob Owens upgraded Okta (OKTA) to Overweight from Neutral with a price target of $270, up from $250.  Strong Q3 results drive confidence in the company’s growth opportunity, Owens tells investors in a research note.  He believes it is “time for investors to dive back in” given Okta’s strong fundamentals and “compelling” outlook.  The recent selloff in the stock has created a buying opportunity as the company is well positioned to deliver further growth into 2022 with new solutions that will address adjacent security segments, according to the analyst.

• UBS analyst Lloyd Walmsley assumed coverage of Alphabet (GOOG; GOOGL) with a Buy rating with a price target of $3,925, up from $3,190.  The analyst believes that shares can see positive estimate revisions and multiple expansion on the back of faster than expected top line growth and margin inflection at Google Cloud, adding that his analysis suggests that the Cloud value attribution could add 7%-12% annual tailwind to shares if this can be realized in the next two years.  Walmsley further stated that strong revenue and margins will become evident in Google Cloud over the next 12 months.

• Walmsley also assumed coverage of Meta (FB) with a Buy rating with a price target of $425, up from $416.  The company is positioned to benefit from better operating performance and multiple expansion following the reset of third quarter results, the analyst told investors in a research note.  Ad checks tell him budget cuts specific to ATT/privacy headwinds were swift, and as ad tech improvements hit, budgets are expected to return quickly, Walmsley added, stating that he sees additional upside potentially coming from Reels, Watch and e-commerce functionality.

Friday, December 3rd

• Coverage of Peloton (PTON) was initiated at Deutsche Bank by analyst Chris Woronka with a Buy rating and a $76 price target.  While there there are scenarios in which Peloton shares go lower from here, there are more scenarios that result in greater upside based on a “fundamental and unemotional analysis” of the company’s earnings power in a “normalized,” fully-reopened economic environment, Woronka tells investors in a research note.  

• DocuSign (DOCU) received multiple negative price target and ratings revisions after reporting  disappointing 3rd quarter numbers and lowering 2022 guidance.  Among the analysts to reconsider the stock was Piper Sandler analyst Rob Owens who downgraded DocuSign to Neutral from Overweight and slashed the price target to $200 from $330  The company posted a billings miss and only a modest revenue beat as it failed to maintain momentum as demand normalization happened faster than expected post-pandemic, Owens tells investors in a research note.  The analyst says DocuSign’s “weak” guidance adds to the uncertainty. He has  a lack of confidence in the timeline of DocuSign’s turnaround, “setting 2022 up for a murky year.”

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