In this article, we will discuss some of the notable stocks analysts are upgrading today. To take a look at some more stocks that are being upgraded, go to Analysts Are Upgrading These 5 Stocks on Friday.
The US market closed in the green for the first time in the last seven weeks as positive earnings results countered the fears of an economic recession. Some notable companies that were upgraded by analysts today include Macy’s, Inc. (NYSE:M), iQIYI, Inc. (NASDAQ:IQ), and HCA Healthcare, Inc. (NYSE:HCA).
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Let’s look at why analysts are upgrading these stocks today and discuss how hedge funds are positioned in them.
10. Graphic Packaging Holding Company (NYSE:GPK)
Number of Hedge Fund Holders: 29
Graphic Packaging Holding Company (NYSE:GPK) is up 4.24% as of 11:40 AM ET after the stock of the Georgia-based manufacturer of packaging solutions was upgraded from a Market Perform to an Outperform rating by Mark Wilde at BMO Capital. The analyst also increased the price target on Graphic Packaging Holding Company (NYSE:GPK) from $20 to $25, reflecting a potential upside of 16.5% from Thursday’s closing stock price. Wilde believes that Graphic Packaging Holding Company (NYSE:GPK) is positioned as one of the most defensive companies among paper-based packaging firms. He thinks that Graphic Packaging Holding Company (NYSE:GPK) is in a recession-resistant business as the demand for products like cartons, cups, foodservice packaging, and microwave cooking solutions is likely to remain unaffected by the economic downturn.
Graphic Packaging Holding Company (NYSE:GPK) was discussed in the Q3 2021 investor letter of L1 Capital. Here’s what the investment management firm said:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Graphic Packaging. We expect the company to deliver strong earnings and cashflow over coming years, and the company remains undervalued at its current share price.”
At the end of Q1 2022, 29 hedge funds held a stake in Graphic Packaging Holding Company (NYSE:GPK).
9. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 55
Boston Scientific Corporation (NYSE:BSX) has jumped 2.67% as of 11:41 AM ET after the medical and surgical device manufacturer was upgraded from a Hold to a Buy rating with a target price of $48 by Mike Matson at Needham. The target price reflects a potential upside of 19.6% from yesterday’s closing price. The analyst anticipates Boston Scientific Corporation (NYSE:BSX) to post high single-digit growth in revenue and earnings despite forecasting moderate growth in Left Atrial Appendage Closure Device WATCHMAN. The deceleration in growth would be offset by Boston Scientific Corporation’s (NYSE:BSX) numerous new products across various segments.
In the research note, Matson noted that following Johnson & Johnson’s (NYSE:JNJ) spin-off of its consumer business, its M&A plans will come into focus, and Boston Scientific Corporation (NYSE:BSX) could be considered as “its target and a good fit.”
Farallon Capital was the leading investor in Boston Scientific Corporation (NYSE:BSX) during Q1 2022.
8. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 34
Roku, Inc. (NASDAQ:ROKU) is 4.13% in the green as of 11:42 AM ET, following an upgrade in rating. The stock of the California-based digital media devices manufacturer was upgraded from Sell to Hold rating by Jeffrey Wlodarczak at Pivotal Research. The analyst maintained the price target on Roku, Inc. (NASDAQ:ROKU) at $80, which is 9.6% lower than yesterday’s closing price.
Wlodarczak highlighted that Roku, Inc. (NASDAQ:ROKU) stock price is hovering around the “reasonable and Street-Low” $80 target price for 2022 and thus does not provide a short opportunity to investors. A positive development for the company was that Cathie Wood’s ARK Investment Management bought nearly 300,000 shares of Roku, Inc. (NASDAQ:ROKU) this week.
Of the 912 hedge funds being tracked by Insider Monkey at the end of Q1 2022, 34 funds held a stake in Roku, Inc. (NASDAQ:ROKU).
7. Ulta Beauty, Inc. (NASDAQ:ULTA)
Number of Hedge Fund Holders: 48
Ulta Beauty, Inc. (NASDAQ:ULTA) has rocketed 4.13% as of 11:42 AM ET after the Illinois-based operator of beauty stores was upgraded from a Hold to a Buy rating by Stephanie Wissink at Jefferies. The analyst increased the price target on Ulta Beauty, Inc. (NASDAQ:ULTA) from $400 to $465, representing a potential upside of 23% from the last closing price.
Wissink added that the turnaround efforts are impacting Ulta Beauty, Inc. (NASDAQ:ULTA). The makeup category in the beauty segment has reached an inflection point, which provides a greater opportunity for momentum during the second half of this year. The analyst also commented that now makeup only brings 45% of the business as opposed to more than 50% before the COVID-19 pandemic.
In its Q1 2022 results, Ulta Beauty, Inc. (NASDAQ:ULTA) raised its revenue outlook from a range of $9.05 billion to $9.15 billion to revised guidance of $9.35 billion to $9.55 billion. Meanwhile, the consensus estimate was $9.16 billion.
Here’s what ClearBridge Investments said about Ulta Beauty, Inc. (NASDAQ:ULTA) in its Q4 2021 investor letter:
“Several encouraging macro trends are emerging in support of two areas outside tech: consumer spending and industrial production. Unlike in past recessions and recoveries, consumer balance sheets have actually improved dramatically since the onset of the pandemic. This should feed through to increased spending on discretionary items offered by retailers like Ulta Beauty. We expect the supply chain constraints contributing to inflation and goods shortages will begin to lessen with an ambitious rebuilding of inventories.”
Ulta Beauty, Inc. (NASDAQ:ULTA) was held by 48 hedge funds at the end of Q1 2022.
6. Boot Barn Holdings, Inc. (NYSE:BOOT)
Number of Hedge Fund Holders: 33
Boot Barn Holdings, Inc. (NYSE:BOOT) has soared 3.82% as of 11:42 AM ET after the Irvine, California-based manufacturer of Cowboy boots, western wear, and work boots was upgraded from a Neutral to an Outperform rating by Jonathan Komp at Baird. The analyst maintained a target price of $115 on Boot Barn Holdings, Inc. (NYSE:BOOT), reflecting a potential upside of 48% from the previous closing price. Komp highlighted that Boot Barn Holdings, Inc. (NYSE:BOOT) had delivered “impressive” results, and the analyst’s recent meeting with the management reiterated his confidence in Boot Barn Holdings, Inc.’s (NYSE:BOOT) ability to deliver stellar results in FY23 by maintaining strong sales and healthy profits.
Boot Barn Holdings, Inc. (NYSE:BOOT) was discussed in the Q4 2021 investor letter of Wasatch Global Investors. Here’s what the investment management firm said:
“The top contributor to Fund performance for the fourth quarter was Boot Barn Holdings, Inc. (BOOT)—a specialty retailer offering increasingly popular Western and work-related apparel, footwear, and accessories. Boots are somewhat resistant to online competition because they often require specialized fitting. The company has benefited from its economies of scale and multi-channel business model, which have kept revenues flowing during virus-related shutdowns. Stimulus payments by the federal government to consumers have helped as well. Boot Barn’s private-label brands, built around well-known personalities in the music business, have enabled the company to convert higher portions of its revenues into bottom-line profits. For most of the period since March 2020, Boot Barn’s stock rallied on these positive conditions—and this rally continued in the fourth quarter. We consider Boot Barn’s management to be excellent, and we’ve continually added to our position on periodic price weakness within the context of an overall upward trajectory in the stock.”
As of Q1 2022, 33 hedge funds held a stake in Boot Barn Holdings, Inc. (NYSE:BOOT).
In addition to Boot Barn Holdings, Inc. (NYSE:BOOT), some other notable companies that were upgraded today include Macy’s, Inc. (NYSE:M), iQIYI, Inc. (NASDAQ:IQ), and HCA Healthcare, Inc. (NYSE:HCA).
Click to continue reading and see Analysts Are Upgrading These 5 Stocks on Friday.
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Disclose. None. Analysts Are Upgrading These 10 Stocks on Friday is originally published on Insider Monkey.
