Analyst Upgrades / Downgrades – 07/25/23

Upgrades

$DDOG – Datadog, Inc.
Recent News
Wolfe Research analysts upgraded Datadog from Peer Perform to Outperform, setting a $140 per share price target in a note to clients on Tuesday. They made this upgrade ahead of the DDOG Dash conference on August 2 and F2Q23 earnings on August 8, highlighting the indispensability of Datadog to engineers.

Despite a slowdown in growth from 63% in the past year to around 25% consensus for the coming year (FY23), the analysts noted that the valuation of the company has expanded. They mentioned positive checks indicating optimization improvements, reduced competition concerns, and the potential for significant growth as Generative AI offerings and Cloud consumption tailwinds are expected to drive strong revenue growth, surpassing previous estimates and outperforming the market in the upcoming years.

Brokerage Firm: Wolfe Research
Rating Change: Peer Perform >> Outperform
Price Target: $140.00
Shares Outstanding: 319.29M Share Float: 263.53M

$WMT – Walmart, Inc.
Recent News
Analysts at Piper Sandler raised their rating from Neutral to Overweight and set a new price target of $210, suggesting a potential 32% upside from Monday’s closing price. They believe that as grocery inflation eases, Walmart has the opportunity to further expand its market share, attributing this growth potential to the company’s emphasis on competitive pricing and anticipating that increased promotional activities will be advantageous during inflationary periods.

Brokerage Firm: Piper Sandler
Rating Change: Neutral >> Overweight
Price Target: $145.00 >> $210.00
Shares Outstanding: 2.69B Share Float: 1.42B

Downgrades

$DIS – The Walt Disney Company
Recent News
Walt Disney shares were downgraded from Neutral to Underweight by Atlantic Equities on Tuesday, with a new price target of $76 per share, reduced from $113. The analysts cited two main reasons for the downgrade: declining ad revenue and challenges in Disney’s direct-to-consumer (DTC) traction.

The analysts expressed concerns about the negative trend in linear TV advertising, estimating that it could lead to a nearly $1 billion reduction in Disney’s projected operating income for 2026. Additionally, they observed a decline in the performance of Disney’s key franchises, including Marvel, Star Wars, and Pixar. Furthermore, they anticipate a slowdown in Disney’s DTC subscriber growth due to a decrease in general entertainment content spending. As a result, the analysts adjusted their earnings per share (EPS) estimates for 2024, 2025, and 2026, lowering them by 20%, 28%, and 31%, respectively, and now sit well below the market consensus.

Brokerage Firm: Atlantic Equities
Rating Change: Neutral >> Underweight
Price Target: $113.00 >> $76.00
Shares Outstanding: 1.83B Share Float: 1.83B

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