In this article, we will take a look at the 10 stocks recently upgraded by analysts. You can skip our detailed analysis of these companies and go directly to Analysts Just Upgraded These 5 Stocks.
Analysts recently upgraded notable stocks, including Snowflake Inc. (NYSE:SNOW), KE Holdings Inc. (NYSE:BEKE) and Cigna Corporation (NYSE:CI). Shares of Snowflake, KE Holdings and Cigna moved higher following the upgrades.
In addition, real estate investment trust Extra Space Storage Inc. (NYSE:EXR) and Albuquerque-based energy company PNM Resources, Inc. (NYSE:PNM), also came into the limelight after analysts improved their ratings for them.
10. Noah Holdings Limited (NYSE:NOAH)
Number of Hedge Fund Holders: 9
Shares of Noah Holdings Limited (NYSE:NOAH) rose for two consecutive trading sessions after receiving an upgrade from JPMorgan on Wednesday, June 22, 2022. The research firm improved its ratings for the wealth management service provider from “Neutral” to “Overweight.”
JPMorgan analyst Katherine Lei thinks that the company’ progress related to the Hong Kong listing has alleviated the U.S. delisting risk. The analyst also raised its price target for Noah Holdings Limited (NYSE:NOAH) from $18.5 per share to $22 per share.
Lei was also impressed by Noah Holdings Limited’s (NYSE:NOAH) improved sales data for the second quarter, implying better sequential revenue gains in April. Moreover, she expects better returns for investors following the potential Hong Kong listing.
9. Funko, Inc. (NASDAQ:FNKO)
Number of Hedge Fund Holders: 20
Shares of Funko, Inc. (NASDAQ:FNKO) hit a new 52-week high of $24.36 on Thursday, June 23, 2022, after JPMorgan upgraded the pop culture collectibles maker from “Neutral” to “Overweight.”
The research firm also lifted its price target for Funko, Inc. (NASDAQ:FNKO) from $25 per share to $28 per share, citing the resilience of the toy category in the uncertain economic environment. JPMorgan analyst Megan Alexander expects Funko’s margins to turn positive this year, with further improvements in 2023.
The upgrade comes a week after Funko, Inc. (NASDAQ:FNKO) inked a deal to buy high-end pop culture firm Mondo for an undisclosed amount. Funko doesn’t see any material impact on its 2022 financial results from the deal.
8. SiteOne Landscape Supply, Inc. (NYSE:SITE)
Number of Hedge Fund Holders: 23
RBC Capital improved its ratings for SiteOne Landscape Supply, Inc. (NYSE:SITE) from “Underperform” to “Sector Perform” on Wednesday, June 22, 2022. However, the research firm lowered its price target for the landscaping products distributor from $128 per share to $118 per share, citing dwindling housing demand.
Yet, RBC Capital analyst Mike Dahl believes the company’s growth prospects look bright in the long term. Dahl added that the concerns surrounding the fading housing demand have already been reflected in the share price of SiteOne Landscape Supply, Inc. (NYSE:SITE).
Separately, asset management firm Baron Funds talked about SiteOne Landscape Supply, Inc. (NYSE:SITE) in its first-quarter 2022 investor letter published in May. Here’s what the fund said:
“Shares of SiteOne Landscape Supply, Inc. (NYSE:SITE), the largest distributor of wholesale landscape supplies, fell for similar reason as Floor & Decor…. concern about the possible impact of rising interest rates and multiple compression. The company reported strong results and had a blowout year in 2021…organic revenue growth of 20%, EBITDA growth of 60%, and free cash flow per share up 90%. SiteOne, too, is projecting more modest growth this year against the tough comparisons and flat margins after superb cost management last year. Maybe growth will be slower than expected this year because of the macro environment…maybe… but the stock has traded to a valuation level that is a discount to where we think it should trade on our estimates for 2022 results. We think this is a special company and management team. We think EBITDA will grow at about 15% a year from this base through organic growth and acquisitions, and the company will generate significant free cash flow to fund future growth.”
7. Frontier Group Holdings, Inc. (NASDAQ:ULCC)
Number of Hedge Fund Holders: 24
Frontier Group Holdings, Inc. (NASDAQ:ULCC) received an upgrade from Raymond James on Thursday, June 23, 2022. Analyst Savanthi Syth raised his ratings for the airline company from “Market Perform” to “Outperform,” citing the potential merger between JetBlue Airways Corporation (JBLU) and Spirit Airlines, Inc. (SAVE).
Earlier this year, Frontier Group Holdings, Inc. (NASDAQ:ULCC) inked a deal to buy Spirit Airlines in a cash and stock deal valued at $2.9 billion. However, JetBlue recently sent a counter proposal to buy Spirit for $3.6 billion, representing a much higher valuation. Spirit is expected to decide on the aforesaid proposals by the end of this month.
Like Frontier Group Holdings, Inc. (NASDAQ:ULCC), analysts also raised their ratings for Snowflake Inc. (NYSE:SNOW), KE Holdings Inc. (NYSE:BEKE) and Cigna Corporation (NYSE:CI).
6. Welltower Inc. (NYSE:WELL)
Number of Hedge Fund Holders: 25
Shares of Welltower Inc. (NYSE:WELL) closed higher on Wednesday, June 22, 2022, after JPMorgan upgraded the Ohio-based real estate investment trust from “Neutral” to “Overweight,” citing sales momentum in the senior housing.
JPMorgan analyst Michael Mueller expressed appreciation for the sales momentum in senior housing driven by Welltower Inc. (NYSE:WELL) through price hikes and persistent growth in occupancy.
The upgrade follows the company’s revised profit outlook for the second quarter of 2022. Earlier this month, Welltower Inc. (NYSE:WELL) updated its Q2 earnings guidance to a range of 22 – 25 cents per share, from its previous projection of 20 – 25 cents per share.
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Disclosure: None. Analysts Just Upgraded These 10 Stocks is originally published on Insider Monkey.
