Investing

Top Analyst Upgrades and Downgrades: Broadcom, Ciena, GoPro, National Oilwell Varco, Snap, Expedia, Palo Alto Networks and More

courtesy of Jon Ogg

Stocks were indicated to open slightly higher yet again on Friday. The enthusiasm for stocks and the economy just keeps surging, and the Dow has crossed 21,000. The bull market is also just a few days away from being eight years old, and investors have bought after every single sell-off for more than five years now. Those same investors are also looking for new ideas and overlooked opportunities.

24/7 Wall St. reviews dozens of analyst reports each day of the week. The goal is to find new investing and trading ideas for our readers. Some of the analyst reports cover stocks to buy, while other reports cover stocks to sell or to avoid.

Some color has been added on many of the following calls, and the consensus analyst price targets referenced are from Thomson Reuters. These are the top analyst upgrades, downgrades and initiations seen on Friday, March 3, 2017:

Broadcom Ltd. (NASDAQ: AVGO) was reiterated as Buy and the price target was raised to $250 at Argus. Broadcom closed up 1% at $217.29 on Thursday and saw multiple price target hikes from analysts. It also hit a new high of $224.98, and the consensus price target is rising after analyst target hikes get factored in.

Ciena Corp. (NASDAQ: CIEN) was downgraded to Neutral from Buy with a $28 price objective (versus a $26.39 prior close) at Merrill Lynch. Ciena has a 52-week trading range of $15.62 to $26.84 and a consensus analyst price target of $28.64.

GoPro Inc. (NASDAQ: GPRO) was started with a Sell rating and assigned an $8 price target at Citigroup. Shares were down 1.6% at $9.27 on Thursday and were indicated down 1.7% at $9.11 on Friday. GoPro has a 52-week range of $8.54 and has a consensus price target of $8.86.

National Oilwell Varco Inc. (NYSE: NOV) was raised to Buy from Hold with a $51 price target (versus a $40.29 close) at Argus. The firm said that this upgrade reflects the company’s narrower-than-expected net loss in the fourth quarter and on management’s optimism about the U.S. land market and expected higher rig counts.

Snap Inc. (NYSE: SNAP) traded more than 200 million shares and closed up 44% at $24.48 on Thursday’s IPO. Shares were indicated up 1.7% at $24.90 on Friday, but a firm called Atlantic Equities downgraded its rating to Underweight from Neutral with a $14 price target (it was not a member of the underwriting syndicate — underwriting firms cannot yet cover the stock). Susquehanna started Snapchat’s parent with a Neutral rating and assigned a $22 price target.

Expedia Inc. (NASDAQ: EXPE) was raised to Neutral from Sell with a $130 price target (versus a $118.92 close) at Citigroup. Expedia has a 52-week range of $96.58 to $133.55 and a consensus price target of $140.97.

Palo Alto Networks Inc. (NYSE: PANW) was downgraded to Hold from Buy at Argus. While it posted 47% earnings per share growth on 26% revenue growth in the second quarter, it missed its revenue forecast and drastically lowered its third-quarter and full-year guidance. Palo Alto shares were just over $150 prior to earnings and were most recently down at $116.50 or so.

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Other key analyst calls were seen in the following:

Clean Harbors Inc. (NYSE: CLH) was started with a Neutral rating at Goldman Sachs.

Dr Pepper Snapple Group Inc. (NYSE: DPS) was raised to Buy from Hold and the price target was raised to $115 from $98 (versus a $94.62 close) at Jefferies. The firm raise the organic sales and earnings forecast and sees the Bai acquisition adding to the growth.

Emerson Electric Co. (NYSE: EMR) was raised to Hold from Reduce with a $55 price target (versus a $60.31 close) at HSBC. The 52-week range is $48.45 to $64.36.

Kite Pharma Inc. (NASDAQ: KITE) was down 5.7% to $75.10 on Thursday and was indicated down 1.5% at $74.00 on Friday. Kite Pharma was downgraded to Hold from Buy with a $74 price target at Stifel.

Kroger Co. (NYSE: KR) was maintained as Buy at Goldman Sachs, but the firm removed Kroger from the prized Conviction Buy list. Argus lowered its price target to $40 from $43.

PHH Corp. (NYSE: PHH) was raised to Outperform from Neutral but the price target was cut to $15.50 from $17.00 (versus a $12.59 close) at Wedbush. The firm called PHH a deep value on all fronts.

SAP A.G. (NYSE: SAP) was raised to Buy from Hold at Soc-Gen.

Southern Co. (NYSE: SO)  was raised to Buy from Hold and the price target was raised to $56 from $50 (versus a $50.32 close) at Jefferies. The firm believes that Southern Company will be able to deliver on its 5% EPS growth target given all the levers it has to pull should Kemper or returns at Power not come to fruition. Argus also downgraded the shares to Hold.

One issue that needs to be addressed after Merrill Lynch raised its S&P 500 price target this week is that Credit Suisse has now started warning investors to expect a Federal Reserve rate hike in March. This is based on higher core U.S. inflation and economic data pointing to strong global growth momentum, as well as with the Fed’s rhetoric becoming increasingly more hawkish and having a hint of urgency. Credit Suisse sees three rate hikes between now and February 2018.

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