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 analysts took over the past week.   

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Monday, August 15th

• Barclays analyst Trevor Young upgraded Poshmark (POSH) to Overweight from Equal Weight with a price target of $17, up from $13, as he assumed coverage of the stock. Poshmark “isn’t out of the woods yet” on navigating ad-targeting post-IDFA, and marketing continues to ramp as a percentage of revenue. However, with a critical mass of active buyers that are still growing, high engagement from the social/gamification aspects of the platform, secular tailwinds, and an opportunity to outperform as consumers trade down in a softer macro, he sees multiples “firming up,” particularly once the company has a path back to positive EBITDA territory, Young tells investors.

• Argus analyst John Staszak downgraded Southwest (LUV) to Hold from Buy. The analyst tells investors in a research note that the stock is at risk of being impacted by inflationary pressures and capacity constraints, adding that while a revenue recovery is underway, shares are unlikely to move higher until there is greater visibility that costs have stabilized.

Tuesday, August 16th

• Daiwa analyst Kazuya Nishimura upgraded PayPal (PYPL) to Outperform from Neutral with a price target of $116, up from $85. While operating visibility “remains murky,” the significant deterioration of the company’s earnings prospects since last year seems to have played out. At the same time, a number of positive catalysts appear to be falling into place, including cost reductions and a commitment to capital returns in collaboration with Elliott Investment Management, Nishimura argued.

• Citi analyst Tyler Radke downgraded Zoom Video (ZM) to Sell from Neutral with a $91 price target. The analyst sees new hurdles to Zoom sustaining growth, including rising competition from Microsoft’s (MSFT) Teams and macro-related weakness hitting small-to-midsize businesses.

• B. Riley analyst Susan Anderson downgraded Bed Bath & Beyond (BBBY) to Sell from Neutral with an unchanged price target of $5. The stock has increased more than three times in price since Bed Bath reported “a very weak” first quarter, leading to the ousting of CEO at the time Mark Tritton.

Wednesday, August 17th 

• Credit Suisse analyst Shannon Cross upgraded Apple (AAPL) to Outperform from Neutral with a $201 price target. Apple’s installed base of greater than 1.8B devices accelerates market adoption of the company’s services and software offerings, creates stickier customer relationships with higher wallet share, and creates significant competitive advantages, Cross told investors.

• Roth Capital analyst Edward Engel upgraded DraftKings (DKNG) to Buy from Neutral with a price target of $25, up from $18, saying he sees a tactical opportunity to own U.S. iGaming stocks ahead of NFL season.

• Guggenheim analyst Sandy Draper downgraded Teladoc (TDOC) to Sell from Neutral with a $25 price target. Teladoc’s revenue growth and EBITDA will remain pressured by its exposure to the consumer segment, from which it generates 40% of its revenue, a strong dollar, and “a challenging macro environment that is elongating sales cycles in enterprise decisions,” Draper told investors.

• Wolfe Research analyst Gal Munda initiated Roblox (RBLX) coverage with a Peer Perform rating. The company gained popularity during the pandemic, becoming the leading virtual gaming platform among children and teens. Still, it now faces some very high comps as the economy reopens, the analyst told investors in a research note.

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Thursday, August 18th

• Morgan Stanley analyst Stephen Byrd upgraded First Solar (FSLR) to Equal Weight from Underweight with a price target of $136, up from $54. The large price target increase is driven primarily by the benefits to the company from the Inflation Reduction Act, which includes a significant subsidy for domestic solar panel manufacturing, Byrd told investors in a research note.

• Wedbush analyst Seth Basham downgraded Bed Bath & Beyond (BBBY) to Underperform from Neutral with an unchanged price target of $5. A “key support leg” for the shares has been removed, with activist investor Ryan Cohen signaling his intent to liquidate the entirety of his 11.8% beneficial ownership in Bed Bath & Beyond, Basham contended.

• Argus analyst Taylor Conrad initiated coverage of Carvana (CVNA) with a Hold rating. The stock is down sharply from its 52-week highs, reflecting the recent rotation away from growth stocks and the company’s inconsistent results. While the company offers competitive advantages over traditional dealerships in vehicle selection, price, quality, and user experience, it is not yet profitable, the analyst noted.

Friday, August 19th

• After assuming coverage of the name, Raymond James analyst Patrick Tyler Brown upgraded Martin Marietta (MLM) to Outperform from Market Perform with a $410 price target. A number of recent headwinds facing the company “could flip to tailwinds into 2023 and beyond, possibly ahead of what the market appreciates,” the analyst tells investors in a research note. Brown also upgraded Vulcan Materials (VMC) to Outperform from Market Perform with a $197 price target after assuming coverage of the name.

• Wells Fargo analyst Aaron Rakers downgraded HP Inc. (HPQ) to Underweight from Equal Weight with a price target of $30, down from $35 ahead of its Q3 results. The analyst states that while he maintains a positive view on the company’s strong free cash flow and continued execution on driving toward a richer portfolio mix, he also sees deteriorating PC fundamentals and macroeconomic sensitivity in its printer results.

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