Earnings season is gearing up investors have to decide which stocks they should lock in their gains and which to hold for more upside ahead. Oggonomics tracks daily Wall Street analyst upgrades and downgrades to look for new ideas in stocks, sectors and the markets. Most analyst upgrades occur after earnings and after key news. But not all of them do.
Perhaps the most interesting type of upgrade is when analysts stick their neck out with a formal upgrade or new “Buy” shortly before a company’s earnings report. Anyone can make ratings and price target changes after an earnings report or after big news. Making a key call ahead of earnings actually involves an analyst sticking their neck out and putting their reputation at risk.
Oggonomics is featuring what are seen as substantial analyst upgrades right before companies jump into earnings season. These are the types of analyst calls that actually fit into the “strategic bull calls” by their design. To qualify as substantial analyst upgrades, a formal analyst rating had to be raised or the firm’s price target had to be raised by more than 5% ahead of a report. Again, these analyst calls were made ahead of the earnings rather than the days after when the stock has already adjusted to earnings and guidance.
Investors are supposed to all have access to the same information in the modern age as Wall Street analysts and even as institutional investors. We don’t actually all have the same access, but we are supposed to. Oggonomics always issues a reminder to its readers that no single analyst report should be used as a sole decision to buy or sell a stock. Some analysts can simply get too carried away. And some analysts just get their analysis and projections wrong.
Please note that there are also some pre-earnings reports with caution as well. These are some of the most substantial strategic bull analyst calls ahead of earnings season seen on Tuesday, July 16, 2024.
Alphabet Inc. (NASDAQ: GOOGL) was started as Outperform and was assigned a $240 target price in new analyst coverage at Wolfe Research. Alphabet closed up 0.8% at $186.53 on Monday and was indicated up 0.4% at $187.25 on Tuesday. The call is a week ahead of earnings. While the highest analyst price target has not been confirmed, this call appears to be the highest price target set by an analyst since at least its last earnings report.
Amazon.com Inc. (NASDAQ: AMZN) was given its own stock bargain call on Prime Day. Wolfe Research issued an Outperform rating in new analyst coverage (along with many other stocks) and its price target was set at $250. Amazon shares closed down 0.9% at $192.72 on Monday and the stock was indicated up 1.2% at $195.00 on Tuesday’s reaction. Prime Day may have had some influence on the price as well.
Meta Platforms, Inc. (NASDAQ: META) was started with an Outperform rating and was assigned a $620 target price in new analyst coverage at Wolfe Research. The call represents a projected upside of 25% from Monday’s $496.16 call and Meta shares were indicated up 0.2% at $497.50 in Tuesday’s early trading reaction.
Microsoft Corporation (NASDAQ: MSFT) received a catch-up target hike from Mizuho, with the firm reiterating its Outperform rating its and raising its target price to $480 from $450. Mizuho noted fairly healthy channel checks, healthy, cloud workloads progressing and good cybersecurity demand ahead of earnings. Microsoft closed at $453.96 on Monday.
Moody’s Corporation (NYSE: MCO) was reiterated as Buy and its price objective was raised to $510 from $430 at BofA Securities. Moody’s closed at $446.70 ahead of the call and BofA highlighted its share price outperformance since the end of April from strong issuance data ahead of next week’s earnings, and the firm also sees year-over-year growth persisting.
Netflix, Inc. (NASDAQ: NFLX) was reiterated as Buy and its price target was raised to $780 from $655 at Jefferies. Netflix closed up about 1.4% at $656.45 on Monday and the shares were indicated up another 0.4% at $659.00 in Tuesday’s post-call reaction.
Palantir Technologies (NYSE: PLTR) was one of the inverse outcome reports as Mizuho became even more cautious. Palantir was downgraded to Underperform from Neutral with the analyst noting that it is increasing difficult to justify Palantir’s high multiple (valuation). The firm even noted a “limited confidence” that Palantir can consistently deliver strong results. That said, Mizuho did note that there are some exciting aspects to Palantir’s story — and the firm raised its prior $21 price target up to $22 in the call.
Revolution Medicines, Inc. (NASDAQ: RVMD) has seen multiple analyst calls on the heels of recent gains as catch-up calls after strong gains have been seen recently. The clinical-stage precision oncology company was reiterated as Buy and its price target was raised all the way up to $62 from $46 at Needham & Co. Another boost came from BofA Securities, reiterating its Buy rating and raising its price objective to $55 from $48 in the call. Both calls highlight continued positive data expectations for its lung cancer study. Oppenheimer reiterated its Outperform rating and raised its prior $45 target to $55 in the call.
Shopify Inc. (NYSE: SHOP) was one of last earnings season top losers, with shares falling from $77 to $63 immediately on the earnings news in May. And by the end of May, Shopify had traded as low as $57. Despite a 1% loss on Monday, the stock has still managed to get back up to $64.21. Now BofA Securities is giving an “all-clear” sign with a more balanced growth and margin profile by upgrading Shopify to Buy from Neutral and raising its price objective to $82 from $78 in the call. Wolfe Research issued new coverage on many tech names, and it started Shopify with an Outperform rating and a $80 price target in that call.
Starbucks Corporation (NASDAQ: SBUX) was also given a negative directional call ahead of earnings despite its own ongoing effort to revamp and update its stores. Evercore ISI formally downgraded Starbucks to In-Line from Outperform and it cut the price target to $80 from $92 in its call. Starbucks had closed down about 2.8% at $72.75 on Monday and shares were indicated down another 0.2% at $72.65 on the heels of the analyst call.
Yum! Brands, Inc. (NYSE: YUM) was also downgraded to In-Line from Outperform and its target was cut to $145 from $160 at Evercore ISI. Yum! closed down 2.6% at $127.89 on Monday and was indicated down 0.9% at $126.70 after this downgrade.
Other positive calls were seen from Wolfe Research for new analyst coverage, and the Peer Perform stocks were not included in this summary:
- Bumble Inc. (NASDAQ: BMBL) started as Outperform and a $14 target.
- Match Group, Inc. (NASDAQ: MTCH) started as Outperform with a $36 target.
- DoorDash, Inc. (NASDAQ: DASH) started as Outperform with a $130 target.
- Uber Technologies, Inc. (NYSE: UBER) started as Outperform with a $90 target.
- PubMatic, Inc. (NASDAQ: PUBM) started as Outperform with a $25 target.
Monday’s top pre-earnings upgrades and downgrades included AMD, Apple, KLA, NVIDIA, Zeta and many other stocks.
