Analyst Upgrades / Downgrades – 07/24/23

Upgrades

$LRCX – Lam Research
Recent News
Lam Research trades higher today following Stifel’s upgrade of the stock to ‘Buy’. Stifel analysts raised the price target for LRCX to $725 from $505, highlighting the potential of DRAM as a way to capitalize on the recovery driven by AI spending. The analysts view Lam as a prime beneficiary of high bandwidth memory (HBM)-driven DRAM growth and expect the company’s revenue trajectory to outperform consensus starting in the second half of the year. Mizuho Securities also raised its price target on LRCX to $680 from $520, citing potential tailwinds in the memory space for fiscal year 2024. Lam Research is set to report its earnings on Wednesday, July 26th, after the market close.

Brokerage Firm: Stifel
Rating Change: Hold >> Buy
Price Target: $505.00 >> $725.00
Shares Outstanding: 134.92M Share Float: 133.94M

$SHOP – Shopify, Inc.
Recent News
Moffett Nathanson analyst Michael Morton upgraded the e-commerce company’s shares earlier today. The upgrade raised the firm’s rating for SHOP stock from “market perform” to “outperform.” The analyst set a price target of $76 per share, indicating a potential 15.9% upside compared to the stock’s previous closing price. The current analyst consensus rating for SHOP shares is a “hold” based on 38 opinions, making this upgrade stand out as more optimistic than the overall consensus.

Brokerage Firm: Moffett Nathanson
Rating Change: Market Perform >> Outperform
Price Target: $76.00
Shares Outstanding:  1.28B Share Float: 1.20B

$NFLX – Netflix, Inc.
Recent News
Despite recent sell-offs in Netflix Inc. shares, Baird analyst Vikram Kesavabhotla remains optimistic about the company’s future. He upgraded Netflix shares to “outperform” from “neutral” with a price target of $500, justifying the rich valuation due to strong momentum and unique business qualities. Kesavabhotla is encouraged by Netflix’s progress in new initiatives, such as advertising and addressing password sharing, which has resulted in better economics for ad-supported plans and increased sign-ups. He sees potential for further price increases and views Netflix as a winning investment with its pure-play streaming asset, scale, profitability, and successful track record. Additionally, the company’s exploration of live streaming and games could drive long-term growth. Despite the upgrade, Netflix shares have faced declines in the past three sessions, currently down more than 11%.

Brokerage Firm: Robert W. Baird
Rating Change: Neutral >> Outperform
Price Target: $340.00 >> $500.00
Shares Outstanding: 443.88M Share Float: 438.56M

Downgrades

$AXP – American Express Company
Recent News
Piper Sandler analysts downgraded American Express shares from Neutral to Underweight and reduced the price target from $172 to $149 per share. Their concern arises from the possibility that AXP may struggle to achieve its targeted revenue and EPS growth due to a significant slowdown in network volume. Additionally, a survey conducted by Piper Sandler indicates that the re-start of federal student debt payments could negatively impact spending and lead to higher default rates, particularly among the 25-34 years old age group. As a result, the analysts expect AXP to face headwinds in revenue growth and operating margins, potentially affecting earnings in 2024. They recommend investors to focus on consumer lenders that have already accounted for a slowdown in their estimates and valuation.

Brokerage Firm: Piper Sandler
Rating Change: Neutral >> Underweight
Price Target: $172.00 >> $149.00
Shares Outstanding: 743.00M Share Float: 742.08M

$TSLA – Tesla, Inc.
Recent News
UBS downgraded Tesla, recommending investors to stop buying due to already fully reflected strong demand. UBS analyst Patrick Hummel shifted his rating on Tesla shares to neutral from buy, citing the recent strong share performance that accounted for the demand response and solid execution. While acknowledging Tesla’s global leadership in the EV space with unparalleled software capabilities, Hummel sees limited upside risk to consensus earnings in the next 12 months due to the delayed impact of new products and initial margin dilution. Despite the correction, Tesla’s stock is still up 110% year-to-date.

Brokerage Firm: UBS
Rating Change: Buy >> Neutral
Price Target: $220.00 >> $270.00
Shares Outstanding: 3.17B Share Float: 2.76B

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