Roku popped higher after a glowing report out of Susquehanna. And here is today's full Pro Recap of the biggest analyst upgrades and downgrades over the past week.
Roku jumps on upgrade
What happened? Susquehanna started the week by upgrading Roku (NASDAQ:ROKU) to Positive with a $75 price target.
Why highlight this note? My biggest observation is that Susquehanna made it clear in the note that Roku has no exposure to SVB. So that's out of the way.
Next in line is the valuation of Roku. Susquehanna wrote:
Shares have more recently traded in a range of 5-6x NTM gross profit, which we view as attractive, and don’t seem to be pricing in future growth improvement (which we believe is likely given the attachment to the high growth CTV market) and the company’s ability to achieve EBITDA positive results in 2024.
Addressing the Connected-TV market, the brokerage commented, "...our checks indicate that the broader CTV market is generally healthy and should see a tailwind from the upfronts."
Further, Roku has been reportedly beta-testing how to add new third-party DSP (Demand Side Platform) buying to the platform and Susquehanna sees this as "...a potential source of incremental high margin revenue."
How did the equity react? Shares spiked abruptly at 6:01am eastern time from $60.20 to $62.34, a gain of nearly 4% within seconds. Roku opened Monday's regular session at $62.56 and closed at $62.82 or 4.7% (adding a mere 20 cents off the initial pre-market spike).
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Occidental Petroleum upped at TD Cowen
What happened? On Tuesday, TD Cowen upgraded Occidental Petroleum (NYSE:OXY) to Outperform with a $70 price target.
Why highlight this note? OXY has been a popular name lately not only for the petrol but also with Warren Buffett headlines. TD Cowen also appreciates the support the comes with an investment from Berkshire (NYSE:BRKa) (NYSE:BRKb), commenting:
We see a superior risk-reward balance of superior exposure to crude pricing, capital structure shifts, captive buying support from Berkshire Hathaway, a favorable free cash yield, well productivity and a differentiated catalyst rich profile in a world of relatively homogeneity across E&Ps.
How did the equity react? OXY closed Monday's regular session at $59.65. Shares gained strength after the evening announcement Monday night of Warren Buffett buying more shares. By 8PM when the professional market closed shares were trading $60.55. The next day TD Cowen's upgrade hit at 5:30AM with shares trading at $60.85. For the following 22 minutes the stock went bid, running all the way to $61.44. Shares opened Tuesday's regular session at $60.65 and closed the session up $1.56, or 4.29%.
Ciena slashed at Morgan Stanley
What happened? Ciena Corp (NYSE:CIEN) was downgraded at Morgan Stanley to Equalweight on Wednesday with a $57.00 price target.
Why highlight this note? Morgan Stanley steps aside due to deteriorating business conditions (headcount cuts and reduced capex) and the push-out of orders. The bank wrote it is seeing "..a more cautious cloud outlook with near-term digestion around headcount / capex budget reductions causing pushout of some orders".
Further, the downgrade from Morgan Stanley followed a day after Raymond James had upgraded the name to Strong Buy and pushed the equity up nearly $3 on Tuesday (from $48.63 to 51.68).
How did the equity react? On Wednesday the equity gave back some of its Tuesday gains, never dropping much below $50. Ciena ended the week up about 5.2% to $52.52.
Juniper Networks gets Outperform rating at Evercore
What happened? Evercore upgraded Juniper Networks (NYSE:JNPR) to Outperform with a $38 price target on Thursday.
Why highlight this note? Juniper is a popular mid-cap name to trade, and Evercore supports what the company is doing, writing, "Juniper looks well positioned to consistently grow revenue in the high single digits while earnings grows in the mid-teens."
Further, Evercore expects cloud growth to remain stable around 8-10% over the next five years due to AI and "cloud-delivered solution."
How did the equity react? Thursday morning shares spiked premarket from $33.38 to $34.18, where it opened the regular session, before fading some of the gains during that session. Juniper ended the week up around 4.8% to close at $34.42.
Howmet Aerospace stamped with Buy
What happened? Benchmark upgraded Howmet Aerospace Inc (NYSE:HWM) to Buy with a $49.00 price target on Friday.
Why highlight this note? Benchmark is revisiting a prior call to step aside from the name due to disconnects between the story and Street expectations. The firm now sees those expectations as "reset" and wrote:
We had downgraded HWM post 4Q:22 earnings as we believed the fragility of the broader aerospace supply chain due to labor dynamics were not reflected in Street expectations. However, with expectations reset coupled with recent significant large aircraft order flow we see the HWM (BMV:HWM) set up as favorable.
How did the equity react? Howmet Aerospace steadily gained all week, rising from a low of $40.47 on Monday to a high of $42.77 immediately following Benchmark's upgrade. Shares ended the week up 3.9% to $42.37.
