5 Huge Analyst Calls
Investing.com | May 14, 2023 20:12
Here is your Pro Recap of the top analyst takeaways so you can make sense of another whirlwind week for markets: Block got slashed along with Qualys, and upgrades were handed to NeoGenomics, Y-mAbs Therapeutics, and Euronav.
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h2 Qualys cut down at Wolfe Research/h2What happened? On Monday, Wolfe Research downgraded Qualys (NASDAQ:QLYS) to Underperform with a $100 price target.
What's the full story? Following the share price surge after earnings, Wolfe is taking the chance to highlight that Qualys's billings growth is unlikely to meaningfully change its revenue guidance. The firm wrote:
Even with 1Q current billings of $133.5M, growing just 9% Y/Y and missing consensus expectation by 2.6%, management still reaffirmed the FY23 revenue growth outlook calling for 13.3% growth at the midpoint. While management expects growth to accelerate in 2Q, our model suggests that the incremental billings dollars added would need to see a meaningful change in trajectory in order to hit the guidance, which we view as a rather tall order in the current environment.
As for what Wolfe's Underperform rating indicates, it utilizes the analyst’s industry-coverage universe as a benchmark:
The security is projected to underperform analyst's industry coverage universe over the next 12 months
About 10% of Wolfe's coverage is Underperform-rated.
How did the stock react? Shares lost ground vs. their lofty close the previous week, sliding 1% to Monday’s regular-session open of $115.25.
h2 NeoGenomics wins buy rating on turnaround success/h2
What happened? On Tuesday, BTIG upgraded NeoGenomics (NASDAQ:NEO) to Buy with a $25 price target.
What's the full story? BTIG appears pleased and impressed with NEO’s operational turnaround following changes to the management team. The firm wrote:
NeoGenomics delivered a strong Q1 beat and raised the guide for the full year. We've been impressed and positively surprised by the change in underlying growth at NEO since the new management team has taken over. We have now seen enough evidence that NEO seems to be in good hands, and we believe the over-arching trajectory of the business is materially improving.
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BTIG benchmarks its equity price performance as follows for a Buy rating:
A security which is expected to produce a positive total return of 15% or greater over the 12 months following the recommendation. The BUY rating may be maintained as long as it is deemed appropriate, notwithstanding price fluctuations that would cause the target to fall outside of the 15% return.
How did the stock react? After the positive company earnings that spurred this upgrade, shares surged more than 18% to end Tuesday at $18.25.
h2 Y-mAbs Therapeutics upped to Outperform/h2What happened? On Wednesday, Wedbush upgraded Y-mAbs Therapeutics (NASDAQ:YMAB) to Outperform with a $13 price target.
What's the full story? Wedbush wrote that it has increased confidence in the growth trajectory of its Danyelza cancer treatment, and also cited the company's SADA technology platform for the treatment of certain cancers:
We are upgrading YMAB shares to OUTPERFORM from NEUTRAL as we believe the company has returned Danyelza to a growth trajectory and will begin reporting data from its SADA program over the next year. Danyelza (naxitamab) sales were $20.3M (NYSE:MMM), representing 93% y/y and 24% q/q growth and beating our estimate of $14.1M.
One of the benefits of this is improved sales and lower cash burn, says Wedbush:
With the increased Danyelza demand, YMAB now sees Danyelza net revenues increasing to $80-85MM (from $60-65MM) in 2023, along with a lower cash burn of between $40-50M.
How did the stock react? Shares of YMAB surged in the premarket Wednesday to open the regular session at $9.98, up from Tuesday's close of $9.23. As always, InvestingPro subscribers had a leg up on this move. Shares closed the day at $9.90.
h2 Block downgraded: 'Macro setup has us feeling uneasy'/h2What happened? On Thursday, CLSA downgraded Block (NYSE:SQ) to Underperform with a $63 price target.
What's the full story? CLSA wrote:
The macro setup has us feeling uneasy. The yield curve is inverted, small business optimism is sliding and household spending appears to be in the process of rolling over.
The firm added further concerns regarding the macro backdrop in the second half of the year:
We see odds on the rise for a hard landing in the US in 2H23, as a retreat by regional banks applies additional pressure directly on consumers and SMBs, who are already under duress from higher interest rates. The stock has lagged the market coming out of a decent earnings print last week, as investors are already likely coming to terms with a lower earnings trajectory in 2024.
CLSA describes its Sell benchmark as follows:
Total return expected to be negative. For relative performance, we benchmark the 12-month total forecast return (including dividends) for the stock against the 12-month forecast return (including dividends) for the market on which the stock trades.
How did the stock react? After InvestingPro's real-time headline on the downgrade, Block shares opened Thursday at $56.65 - a slide from Wednesday’s close of $57.53. Shares ended the regular session at $57.31.
h2 Euronav upgraded to Buy at Deutsche on valuation/h2What happened? On Friday, Deutsche Bank upgraded Euronav (NYSE:EURN) to Buy with a $20 price target.
What's the full story? This upgrade comes about two weeks after Stifel's upgrade. Deutsche Bank sees their upgrade as primarily on valuation, writing:
...we are upgrading EURN shares to a Buy and believe the recent pullback in the share price offers investors an attractive entry point to purchase shares into what we think will be a stronger rate environment in 2H23 and into 2024. This upgrade is based on shares trading below 20% of our price target of $20 per share.
The analyst further mentioned that tanker rates ought to regain momentum in the second half of 2023.
Deutsche Bank benchmarks its Buy rating as:
Based on a current 12-month view of TSR (total shareholder return), we recommend that investors buy the stock
How did the stock react? Euronav shares sold off Friday to close at $16.22, down from the open of $16.71, a slide of roughly 1.76%.
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