Street Calls of the Week: Block Upgraded on Growth Opportunities
This week on Wall Street brought a mix of upgrades and downgrades from various analysts, with Block, Plug Power, and Cigna seeing upgrades, while Bloom Energy and Tractor Supply faced downgrades. Let’s delve into the significant moves and their underlying reasons.
Bloom Energy’s Downgrade: A Closer Look
BofA shifted its stance on Bloom Energy Corp to Underperform, coupled with a new price target of $10.00. The firm anticipates flat revenues for 2023-2025, attributing this forecast to historical challenges in visibility and growth acceleration. Despite an agreement expansion with partner SK, evidence of commercial success remains scant. Consequently, BofA has adjusted its price objective from $16 to $10, expecting no order growth and continued average selling price declines for the upcoming years.
Block’s Favorable Upgrade
Block’s growth prospects have caught the attention of BTIG analysts who now recommend a Buy, seeing it as an attractive investment. With a focus on connecting consumers and merchants via its Cash App and Square ecosystems, Block is expected to strengthen its market position. The company’s emphasis on cost management aligns well with its target for a mid-20s adjusted operating margin by 2026, in line with GAAP profitability expectations.
Plug Power: A Bullish View
Plug Power Inc received a Buy rating from Roth/MKM, backed by a $9 price target, following an encouraging visit to the company’s Georgia green hydrogen plant. Analysts were reassured by the smooth ramp-up and resolution of prior technical concerns, forecasting that the plant will confirm its full rate production shortly. This facility is seen as a crucial asset for the green hydrogen sector, heralding a low-carbon hydrogen future powered by renewable energy.
Cigna’s Upgrade Reflects Increased Confidence
Cigna Corp’s upgrade to Buy by Deutsche Bank, with a price target of $370, reflects a boosted target multiple based on the firm’s belief in Cigna’s ability to meet or exceed its 2025 EPS estimates. This confidence stems from the company’s strategic focus on accretive acquisitions and share repurchases, reducing the impact of its underperforming Medicare Advantage segment.
Tractor Supply’s Slight Downgrade
In light of Tractor Supply Company’s recent performance and the market’s outlook, Raymond James has adjusted its rating from Strong Buy to Outperform, setting a new target at $250. This change is prompted by the realization of the stock surpassing its prior target and the anticipation of a modest earnings year in 2024. Nonetheless, the firm remains optimistic about Tractor Supply’s long-term growth potential and its resilience against current economic pressures.
As Wall Street continues to navigate through shifting market dynamics, these upgrades and downgrades highlight the nuanced views analysts hold based on company performance, market trends, and economic indicators. Investors and market watchers alike will watch closely to see how these firms adapt and respond in the coming months.
