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Roku Blazes Higher on Huge Upgrade: 5 Big Analyst Calls | Pro Recap

Published 19/02/2023, 09:58 pm

Roku shares climbed even further after leaping to a Buy rating at BofA. And here is your full Pro Recap of the biggest analyst calls you may have missed on InvestingPro this past week. Start your free 7-day trial to get this news first.

Roku double upgraded at BofA

What happened? To end a tremendous week for Roku (NASDAQ:ROKU), Bank of America Securities double upgraded the stock - to Buy from Underperform, jumping past the Neutral rating - with an $85.00 target price.

Why highlight this note? The firm completely changed its opinion on the company, noting evidence for a path for revenue and margins to improve. Further, BofA highlighted that the quarterly report and guidance were better than initially feared. Some traders have commented that they see Roku as the operating system of streaming, much like Android and Apple (NASDAQ:AAPL) respectively run theirs for mobile devices.

How did the equity react? Roku soared 30% on the week, rising to $71.56 on Friday, up from roughly $55.00 on Monday's open. Friday shares gained nearly 1.5% following the double upgrade and earnings.

Zillow upped to Outperform at Evercore

What happened? Evercore ISI began the week by upgrading Zillow (NASDAQ:ZG) to Outperform and raising its target price to $61.00.

Why highlight this note? Evercore sees the U.S. housing market beginning to recover either (a) now or (b) "very soon." To wit, the firm wrote, "As the consistently leading Online Real Estate information/marketing platform for both consumers and real estate agents, we believe Zillow should fully participate in the real estate market recovery."

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How did the equity react? Shares gained through the week into earnings midweek. The equity rose from just over $44 Monday morning to about $48 intraday Thursday before selling off to around $45, ending the week up just over 1%.

Goldman stamps a buy rating on Occidental Petroleum

What happened? Goldman Sachs upgraded Occidental Petroleum (NYSE:OXY) to Buy on Tuesday with an $81.00 target price.

Why highlight this note? Goldman has a positive view on the company's valuation, addressing the robust free cash flow and strength in the "up-stream portfolio." On FCF, Goldman elaborated, "The magnitude of free cash flow that can be returned to shareholders and to redeem preferred equity." Moreover, regarding the assets, "We believe the Upstream portfolio is underappreciated, with high quality assets in the Middle East and Permian (where productivity is positively surprising in the Delaware for OXY."

How did the equity react? Shares actually were sold on the upgrade, as some market participants assume that Goldman upgrades serve to signal that the firm is unloading the equity from its own portfolio via its internal trade desk. Others took the call as a chance to sell just a bit higher and cash out. Occidental ended the week down over 6% at $60.73, down from Monday's open at $65.00.

Mariott rating cut at Evercore

What happened? On Wednesday, Evercore downgraded Marriott International (NASDAQ:MAR) to In-Line with a price target of $180.00 following the company's earnings for Q4.

Why highlight this note? The commentary, while relatively basic, highlights the valuation run-up in the hotel industry following the excitement for share appreciation as nations reopened post-COVID, and now through the excitement for China reopening. Evercore wrote to clients, "Having run through our $180 price target, with shares up 22% YTD (vs. S&P +8%) and +32% since our July ‘22 assumption of coverage (vs. S&P +7%) we’re moving to the sidelines and lowering our rating on MAR shares to In-line from Outperform."

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How did the equity react? Shares traded higher midweek into earnings, then traded lower in the second half of the week. Monday started at around $172, and shares hit a midweek high of $182 before closing the week at $172.52.

Activision gets a Buy rating at Deutsche

What happened? Deutsche Bank upgraded Activision Blizzard (NASDAQ:ATVI) to Buy with a $90.00 target price.

Why highlight this note? In Deutsche Bank's note, which InvestingPro had out to subscribers before anyone else, the firm wrote, "Despite industry-wide headwinds to consumer spending, we think ATVI can generate healthy levels of growth this year. The company's core franchises are gaining market share at the expense of other publishers, and we are predicting that ATVI's 2023 release slate (ie Diablo IV and the next Call of Duty) will be commercially successful. We are now forecasting growth of 12% and 17% for net bookings and adj. operating income, respectively; ahead of the company's guidance for "at least" high-single-digit growth."

How did the equity react? Shares gained steadily all week, rising 2.28% to $77.57 on Friday's close, up from Monday's open of $75.84.

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