This Week’s Top Analyst Recommendations

Stock analysts can provide valuable insight into the sentiment around a particular 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 brokerage firms took over the past week. 

  

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Monday, April 4th

• UBS analyst Paul Gong upgraded Nio (NIO) to Buy from Neutral with a price target of $32, down from $42. The stock is down 44% in the past 12 months. While Nio’s sales volume growth has slowed with “aging products,” three new model launches in 2022, based on its NT2.0 platform, could drive sales acceleration.  The UBS Evidence Lab electric vehicle consumer survey shows Nio’s brand recognition is improving, which provides a basis for strong sales from new products, writes the analyst.
• Loop Capital analyst Laura Champine downgraded Crocs (CROX) to Hold from Buy with a price target of $80, down from $150. The analyst notes that investor sentiment on the stock has “changed materially” with the company associated with “Covid winner” names, though she would rather wait on the sidelines for clarity on normalized growth and margin rates. Champine adds that while Crocs’ Hey Dude acquisition may accelerate the overall growth rate based on its ability to sell the brand into its legacy distribution, she also expects investors to wait for proof points before stepping into the shares, stating that at 8-times expected Fy22 earnings, Crocs shares look “fairly valued”.
• BofA analyst Julien Dumoulin-Smith upgraded SunPower (SPWR) to Neutral from Underperform with a price target of $23, up from $13, following the company’s analyst day, which he said offered clarity on the growth trajectory. Given what he calls “admittedly a robust turnaround plan with specific steps,” Dumoulin-Smith made “material” upward revisions to his estimates following the event, he tells investors, adding that he sees “no reason to doubt its substantive turnaround outlined given sector tailwinds.”

Tuesday, April 5th

• Wells Fargo analyst Jeff Cantwell initiated coverage of Shopify (SHOP) with an Overweight rating and $834 price target. After the recent pullback, he views the valuation as “more palatable” for Shopify, which he thinks should grow gross merchandise value rapidly in fiscal 2022 and 2023 with concurrently strong revenue growth.
• Wells Fargo analyst Jeff Cantwell initiated coverage of PayPal (PYPL) with an Overweight rating and a $152 price target. The stock’s reset is overdone as the company has “operating tailwinds” across its platforms that will produce strong growth post the lapping of eBay, driving shares higher, Cantwell told investors in a research note. The analyst also started Block (SQ) coverage with an Overweight rating and $165 price target.
• MKM Partners analyst Rohit Kulkarni downgraded Twitter (TWTR) to Neutral from Buy with an unchanged $49 price target. While the analyst is excited about Elon Musk’s involvement, he also sees risk-reward as “fairly balanced” at current levels.
• Wedbush analyst Nick Setyan downgraded Starbucks (SBUX) to Neutral from Outperform with a price target of $91, down from $105. The analyst no longer believes that a return to low double digits earnings per share growth in fiscal 2023 is not at risk, particularly with the termination of repurchases and a signal from management that meaningful incremental investments may be ahead.
• Wolfe Research analyst Scott Group downgraded UPS (UPS) to Peer Perform from Outperform and removed his initial $265 price target on the shares. UPS has been among the best-performing transport stocks with very strong pricing, volumes, and margin improvement over the past two years. He is moving to the sidelines after the “material outperformance” as he now sees less earnings upside potential. Group also downgraded Ryder System (R) to Underperform from Peer Perform with a $68 price target.

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Wednesday, April 6th

• Bank of America analyst John Murphy double upgraded Aptiv (APTV) to Buy from Underperform with a price target of $165, up from $125, as he rebalanced his ratings among his automakers and suppliers coverage. The analyst also double upgraded Lear (LEA) to Buy from Underperform with a price target of $195, up from $150, upped Visteon (VC) and Adient’s (ADNT) ratings to Neutral from Underperform with price targets of $140, and $47, respectively.
• Bank of America analyst Omar Dessouky reinstated coverage of Take-Two (TTWO) with a Buy rating and a $213 price target. The stock looks poised to break out of its two-year range as “COVID joiner churn” has likely subsided, and given that its release pipeline for 2023-2024 is the largest in the company’s history, the analyst told investors in a research note.
• BMO Capital analyst James Thalacker initiated coverage of Atlantica Sustainable Infrastructure (AY) with a Market Perform rating and a $37 price target. The analyst finds the stock fairly valued relative to peers, given Atlantica’s “slightly slower” growth profile and geographic mix. However, he acknowledges the company’s international investments are underpinned by attractive contract terms/ which should limit volatility.

Thursday, April 7th

• Berenberg analyst Rudy Yang upgraded Yeti Holdings (YETI) to Buy from Hold with a price target of $92, down from $103. The recent de-rating in the shares is “unwarranted” and provides an excellent opportunity to enter the stock, Yang told investors in a research note.
• Wells Fargo analyst Zachary Fadem downgraded Wayfair (W) to Underweight from Equal Weight with a price target of $100, down from $110. The analyst is “incrementally cautious on macro-sensitive, big-ticket and housing impacted retailers following recent events and channel checks.”
• Barclays analyst Brian Johnson downgraded Ford (F) to Equal Weight from Overweight with a price target of $17, down from $23. Despite the selloff, investors are still underestimating risks to the autos and auto parts sector, from inflation and production pressures and the impact of interest rate hikes on portfolio allocations, Johnson told investors in a research note.
• Deutsche Bank analyst George Hill downgraded Rite Aid (RAD) to Sell from Hold with a price target of $1, down from $16, ahead of the company’s fiscal fourth-quarter results on April 14. The analyst believes COVID has “hastened the decline” of the retail pharmacy segment, and he sees the potential for a “dramatic negative inflection point” for the shares as its preliminary fiscal 2023 outlook “seems to be unattainable.”

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Friday, April 8th

• Gordon Haskett analyst Chuck Grom upgraded Target (TGT) to Buy from Hold with a price target of $300, up from $255, implying over 30% upside from current levels. Traffic trends in February and March have been “remarkably consistent” at Target, and with a later Spring/Easter shift still on the come, these trends could inflect higher in the coming weeks, Grom tells investors in a research note.
• Goldman Sachs analyst Will Nance downgraded Robinhood (HOOD) to Sell from Neutral with a price target of $13, down from $15. Nance tells investors that softening retail engagement levels, particularly among the low-end consumer, continued weakness in account growth, and a “limited path to near term profitability” are likely to limit the stock’s outperformance over the next twelve months research note.

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