Adobe scores pair of upgrades; Microsoft called a buy on Q3: 4 big analyst picks
Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Microsoft, Adobe, Snap, and Live Nation Entertainment.
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Adobe picks up two upgrades
Oppenheimer and DA Davidson both upgraded Adobe Systems (NASDAQ:ADBE) to buy-equivalent ratings.
Oppenheimer stamped the stock with a $660 price target, about 25% higher than Wednesday's close. The analysts cited Adobe’s strengthening business momentum and a promising outlook for fiscal 2024 - as well as its dominant position in generative AI, confirmed by customer and industry surveys. They believe Adobe’s focus on R&D and its AI Firefly product strategy has reenergized its product offerings, placing “the company in a better position for durable growth from adding users and monetizing on its large install-base.”
The analysts believe investors "will be rewarded through yearend and next fiscal year as concerns on penetration, pricing tolerance, and generative AI weakening the competitive moat dissipates."
DA Davidson, along with its upgrade of Adobe, added the company to its "Best-of-Breed Bison” list - a "select group of long-term best in class companies with sustainable competitive moats" - and raised the target by $140 to $640.
The analysts said the addition to the "Best-of-Breed Bison" list was based, among other things, on "its position as a market leader in a >$200B FY’24 TAM, robust & predictable revenue streams, sustainable competitive advantage, exceptional financials, a powerful brand, and a shareholder-oriented management team."
Shares were up fractionally to $522.96 in recent trading.
Microsoft upgraded at HSBC following Q3 beat
HSBC upgraded Microsoft (NASDAQ:MSFT) to Buy from Hold and raised its price target to $413.00 from $347.00, as reported in real-time on InvestingPro.
Shares closed with a 3% gain Wednesday after the tech giant reported its Q1 results that beat Wall Street estimates, driven by stronger growth in its Azure cloud unit. Although the stock surged over 6% immediately after the Q3 report went out, it then slightly retreated on a cautious outlook: According to CFO Amy Hood, Q2 revenue is expected to be around $60.9 billion (up or down $500 million), which is only in line with the guidance.
HSBC writes, “With PC sales and gaming revenue inflecting and MSFT benefitting from a compelling AI product portfolio, we expect MSFT to outperform on revenue growth against the sector. The company has also been exhibiting good expense discipline, and operating margins are benefiting.”
Shares were recently down 2.2% to $333.24.
Snap upgraded following Q3
China Renaissance upgraded Snap (NYSE:SNAP) to Hold from Sell with a price target of $9.00 following the company's reported better-than-expected Q3 results earlier this week.
While shares initially jumped as much as 20% in after-hours trading on Tuesday following the company’s Q3 report, they closed with more than a 5% loss the next day following cautious commentary during the earnings call, especially about a slowdown in ad spending affecting the company’s current quarter sales.
Live Nation Entertainment upgraded to Outperform
Live Nation Entertainment (NYSE:LYV) shares rose more than 1% pre-market today after Evercore ISI upgraded the company to Outperform from In Line with a price target of $100.00.
The analyst noted that regulatory challenges, uncertainty about 2024’s growth, and upside to near-term estimates create an attractive entry point for the stock. “Antitrust investigations are nothing new for Ticketmaster, and we don’t believe the current DOJ investigation poses meaningful risk to LYV equity at $78/share,” added the analysts.
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