4 big analyst picks: Walmart has 'opportunity to extend market gains,' says Piper
Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Walmart, Datadog, and Neurocrine Biosciences, and initiations at Savers Value Village.
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Walmart gets upgraded at Piper Sandler
Walmart (NYSE:WMT) shares rose more than 1% pre-market today after Piper Sandler upgraded the company to Overweight from Neutral and raised its price target to $210.00 from $145.00, as reported in real-time on InvestingPro.
The analyst said the company "has an opportunity to further extend market gains" as grocery inflation subsides, adding:
While we think intuitive logic dictates that WMT is well positioned during an inflationary period (trade down), we believe that a gradual intensification of promos augurs well for WMT given its sharp focus on price, and we raise our estimates accordingly.
Piper also cited the turnaround at Sam's Club, which saw the Walmart-owned warehouse club outperform competitor Costco (NASDAQ:COST for seven consecutive quarters, arguing that this "remains underappreciated."
The company is set to report its Q2/24 earnings on Aug 17. Street estimates stand at $1.67 for EPS and $159.33 billion for revenues.
Shares were up 1.5% in recent premarket trading to $160.77.
Datadog surges on Wolfe Research upgrade
Datadog (NASDAQ:DDOG) shares gained more than 3% pre-market today after Wolfe Research upgraded the company to Outperform from Peerperform with a price target of $140.00 ahead of the company’s upcoming Q2/23 earnings report, scheduled for August 8.
Initially, when Datadog was started as Peer Perform, Wolfe’s analysis indicated a potential deceleration in growth due to various factors such as macro, optimization challenges, competition, and go-to-market (GTM) execution. As expected, the growth did slow down significantly (from 63% in 2022 to approximately 25% consensus for 2023). However, despite this deceleration, the valuation of the company has actually expanded. Additionally, recent checks suggest that the optimization challenges are abating, competition is easing, GTM execution has improved, and there are promising Generative AI tailwinds that could position Datadog as one of the fastest-growing software companies.
Savers Value Village earns bullish coverage initiations from multiple Wall Street firms
Savers Value Village (NYSE:SVV) received coverage initiations from a number of Wall Street firms, including Goldman Sachs, UBS, Jefferies, Baird, and Piper Sandler, following its IPO last month.
Goldman initiated coverage with a Buy rating and a price target of $28.00. According to the bank, Savers Value Village is expected to see significant profitable growth due to consistent comp growth across geographies, accelerated unit growth in infill markets, and improved supply quality leading to better margins and increased free cash flow generation.
Neurocrine Biosciences earns an upgrade at Leerink Partners
Leerink Partners upgraded Neurocrine Biosciences (NASDAQ:NBIX) to Outperform from Market Perform and raised its price target to $125.00 from $115.00, noting that the risk/reward at current levels is very attractive.
Leerink raised its Ingrezza sales estimates once again based on the strong Rx trends. Ingrezza estimates were raised from ~$1.75B to ~$1.8B, from $2.0B to $2.1B, and from $2.2B to $2.3B for 2023, 2024, and 2025, respectively.
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