Splunk Inc. (NASDAQ: SPLK) may have closed down 0.9% at $134.65 on Friday, but the company did beat earnings and gave strong guidance. Analysts liked the move better than the stock’s reaction might indicate. The overall rating remains Buy/Outperform, but here were some of the price target hikes seen:
- Barclays to $158 from $154
- Credit Suisse to $160 from $130
- Monness Crespi & Hardt to $200 from $170
- Needham to $162 from $145
- Raymond James from $122 to $157
- Wedbush from $146 to $159
- Wells Fargo from $145 to $165
Shares of VMware Inc. (NYSE: VMW) closed up 3.7% at $178.20 on Friday, while the 52-week range is $113.90 to $184.41. The 52-week high was put in this past week, and that’s also an all-time high since its debut in 2007. VMware saw at least seven analysts hike their target prices:
- Barclays to $200 from $168
- BMO Capital Markets from $170 to $195
- Citigroup to $201 from $166
- Credit Suisse from $160 to $185
- Deutsche Bank to $200 from $190
- Wedbush from $173 to $190
- Wells Fargo to $180 from $155
Zscaler Inc. (NASDAQ: ZS) traded up over 15% at $57.50 in last Thursday’s after-hours session after solid earnings, and the stock ended almost 22% higher at $60.57 by Friday’s closing bell. Its post-IPO range is now $24.76 to $61.14. Wedbush reiterated its Outperform rating and raised its target to $68 from $53, noting that total revenue growing 65% and billings accelerating 74% year over year handily beat consensus expectations. One of the more interesting aspects of Zscaler is that it seems to have created an entirely new niche within data and enterprise security.
Two other target hikes were seen as well, but with caution on the valuations:
- Deutsche Bank maintained its Hold rating based on valuation but still boosted its target to $57 from $44.
- Barclays issued a similar call, maintaining its Equal Weight rating but raising its target to $55 from $42.
Cisco Systems Inc. (NASDAQ: CSCO) might be considered a runner-up because the calls were not all within the past 10 days. The company has been changing its model to offering security and services with recurring revenue streams on top of selling its industry-leading networking equipment. Cisco also should be a serious 5G winner in the coming years, and its stock hit highs in the end of February not been seen since the glory days of the tech and internet bubble in 1999 and 2000.
These were mid-February calls with positive ratings and price target hikes:
- Citigroup to $56 from $52
- KeyBanc to $55 from $53
- Wells Fargo to $57 from $52
- Independent research firm Argus reiterated its Buy rating and raised its target to $65 from $55.
If you want to see another grouping of key analyst calls, Goldman Sachs issued very positive Buy ratings in upgrades or new coverage on more than a dozen stocks in February. Only one of them performed badly, and four or five of them already managed to achieve what were supposed to be their 12-month total targets.
Remember that analysts are not omniscient. Investors should consider that analysts sometimes stick with a positive story for too long, only to eventually keep staying positive with lowered price targets when they should have just downgraded the stock and said “the best of this story has been seen.” Sometimes the baseline scenarios also run into trouble. In many cases, an analyst may have not had any better information or knowledge on a company than the rest of us. And finally, sometimes a view from an analyst is just wrong from start to finish.
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