Amid the biggest ratings changes in the past week, Verizon was bumped to Overweight at Morgan Stanley and Datadog enjoyed a double dose of positive analyst coverage. Here are all of this past week’s most significant analyst rating changes, covered first on InvestingPro+. Sign up for comprehensive, rapid-fire coverage of market-moving analyst moves.
Stifel started the week with an upgrade of Under Armour (NYSE:) (NYSE:) to Buy from Hold. Class A shares jumped 5% at the open Monday after InvestingPro+ reported the upgrade, closing the day up more than 10%.
The Stifel analyst noted his checks indicate lead times are tightening, which ought to drive 2023 calendar year cash flows tailwinds. As 2023 nears and uncertainty continues to build, Stifel reminded clients in its note of the comfort that buttresses a company with disciplined operational management and a strong balance sheet.
For the week, Class A shares were up 1.4% from Monday’s open.
UBS downgraded Norwegian Cruise Line (NYSE:) to Neutral from Buy after the close Monday chiefly on valuation after equity holders were rewarded with a 30%+ appreciation since October. Norwegian shares sank 2.8% in Tuesday’s session.
One concern mentioned in the note to clients regards NCLH’s ability to manage expenses as compared with pre-COVID 2019. Primarily UBS sees more downside than upside for the stock as the story progresses into 2023 and a looming U.S. recession.
The stock lost 6% for the week.
Datadog (NASDAQ:), meanwhile, was upgraded by Oppenheimer to Outperform on Wednesday, and shares jumped 3.8% at the open after InvestingPro+ reported the move, peaking at an intraday gain of 4.9% at $83.60. Wedbush followed Thursday with an Outperform initiation.
Oppenheimer noted the combined benefits of growth and profits to the valuation dynamics. The firm believes Datadog is a valuable recession play even though there is no guarantee of it being “recession proof.” The analyst also reminded clients of the company’s strong history when it comes to hitting investor expectations.
Wedbush believes Datadog’s downside is limited as the macro economy takes its toll on business, and notes that customer adds have been flat as momentum at Datadog has slowed. Wedbush echoed Oppenheimer’s view on the strength of the company, commenting the company is “best in class” in terms of sales productivity.
Shares were up 4% for the week.
Morgan Stanley upgraded Verizon (NYSE:) Friday on upside potential relative to peers over the next 12 months.
The bank believes Verizon’s current valuation is discounting overly negative expectations and is likely failing to incorporate shifting trends into the equity price. Further, as debates continue on a possible 2023 U.S. recession, one of the attractions at Verizon is a 7% dividend yield.
Still, shares lost 1.7% for the day and 1.5% for the week.
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