Upgrades and Downgrades; Wall Street analysts have upgraded Micron, Magnite, and GoodRx Holdings, while downgrading Him Hers Health.
Micron
Morgan Stanley Upgrades Micron
- Upgraded Micron to Equalweight
- Sets $130 price target.
Morgan Stanley Acknowledges Missteps in Negative View of Micron
- Acknowledges the misstep of maintaining a negative stance on Micron.
- Acknowledges three key errors in their research report:
- Overemphasis on recent losses.
- Prediction of significant cash burn, financial losses, and book value erosion.
- Overestimation of the significance of High Bandwidth Memory (HBM) in the narrative.
- Acknowledges Micron’s robust 3e product, which propelled them into the winners’ camp during a phase when proximity to AI drove most of the alpha generation in the space.
Micron Stock Reaction:
- Opened regular session at $127.30.
- Closed at $129.00, 2.96% gain from prior day.
PENN Entertainment
Raymond James Coverage on PENN Entertainment
- Started coverage on Tuesday.
- Targeted $20 price.
PENN’s Q1 Q1 Performance and Outlook
- PENN faced challenges in Q1 due to weather-influenced weakness in the land-based business, higher-than-expected losses in the digital sector, and a significant selloff due to management-related issues.
- Despite setbacks, the core land-based gaming business remains robust, achieving record revenue and EBITDAR levels in 2023.
- Raymond James’ positive stance on PENN’s stock is based on the belief that the market is undervaluing the digital business and the fair value for the land-based business is estimated to be north of $20 per share.
- Despite challenges, Raymond James identifies value in the land-based operations and predicts the security is expected to appreciate or outperform the S&P 500 over the next 12-18 months.
Penn Entertainment Stock Reaction
- Opened regular session at $16.39
- Closed at $16.41
- Gained 0.86% from prior day.
Hims Hers Health
Hims Hers Health
- Downgraded to Neutral.
- Price target: $20.
Citi’s HIMS Program and Market Analysis
- Citi expresses encouragement for HIMS’ new program, despite potential regulatory and legal risks.
- HIMS is partnering with a large 340B manufacturer producing Semaglutide, using API, processes, and expedients similar to Novo.
- Despite a 20% stock increase since the announcement, HIMS has added approximately $760M of enterprise value on limited new information.
- Citi downgrades HIMS from Buy/High Risk to Neutral/High Risk, awaiting further details on GLP-1 economics and durability.
- Despite the downgrade, Citi remains attentive to HIMS’ future moves and market potential.
Hims & Hims Health Stock Reaction
- Opened regular session at $16.90.
- Closed at $16.17, 7.84% loss from prior day.
Goodrx Holdings Inc
RBC Capital Upgrades Goodrx Holdings Inc
- Upgraded to Outperform
- Targeted $10 price.
GDRX’s Growth Opportunities and RBC Capital’s Price Target
- GDRX’s ISP and DC initiatives and MfgSolns business scaling offer growth opportunities.
- The company has signed five PBMs and seven top-10 pharmacies, indicating a 3-year mid-teens+ EBITDA CAGR.
- RBC Capital believes execution will re-rate GDRX’s current 10x ’25 EBITDA valuation to align with growth rate and 14x peer average.
- Analysts have raised the price target to $10.
GoodRx Holdings Stock Reaction
- Opened regular session at $7.74.
- Closed at $7.24, 0.56% gain from prior day.
Magnite Inc
BofA Securities Upgrades Magnite Inc.
- Upgraded to Buy.
- Price target: $15.
RBC Upgrades MGNI
- MGNI upgraded as premier supply-side technology solution in CTV advertising.
- Sector expected to grow at mid-teens rate over medium term.
- MGNI excels in automated ad execution.
- MGNI recognized as preferred ad tech collaborator for buy-side entities and sell-side participants.
- Leading-edge programmatic technology underscored by partnerships with Netflix and MediaOcean.
- Combines an ad server and an SSP, serving as a hub for publishers’ programmatic frameworks.
- Less susceptible to disintermediation than standalone SSPs.
- Disney and Paramount’s insights indicate rapid shift towards programmatic methods.
- Projections of 50% increase by end of 2024 within premium streaming services.
- Analysts at RBC Capital view sustained market share growth for MGNI.
- “Buy at BofA” implies a total return of at least 10%.
Stock Reaction:
- Opened regular session at $12.03
- Closed at $12.57
- Gained 13.55% from prior day.
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