In this article, we discuss the 5 stocks receiving upgrades from analysts. If you want to see more such stocks on the list, go directly to Analysts Are Upgrading These 10 Stocks.
05. Old Dominion Freight Line, Inc. (NASDAQ:ODFL)
Number of Hedge Fund Holders: 37
Thomasville, North Carolina-based Old Dominion Freight Line (NASDAQ:ODFL) is a leading less-than-truckload (LTL) motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. The company operates through a network of more than 250 service centers throughout the United States. On June 27, BofA Securities upgraded its rating on Old Dominion Freight Line (NASDAQ:ODFL) from ‘neutral’ to ‘buy’. The analyst’s recommendation indicates a positive outlook on the company’s stock. Additionally, BofA Securities set a price target of $391 for Old Dominion Freight Line (NASDAQ:ODFL) Freight Line. This upgrade suggests the analyst believes the stock has the potential to increase in value.
04. Guidewire Software, Inc. (NYSE:GWRE)
Number of Hedge Fund Holders: 40
On June 27, Stifel upgraded its outlook for Guidewire Software, Inc. (NYSE:GWRE) from Hold to Buy. Prior to this upgrade, as of June 1, the average one-year price target for Guidewire Software, Inc. (NYSE:GWRE) was estimated to be $84.15. Various forecasts ranged from a low target of $60.60 to a high target of $99.75.
Alger Small Cap Focus Fund made the following comment about Guidewire Software, Inc. (NYSE:GWRE) in its Q1 2023 investor letter:
“Guidewire Software, Inc. (NYSE:GWRE), offers on-premises and cloud-based solutions for property and casualty (P&C) insurance companies, automating processes such as premium billings, claims management, and policy fulfillment. Under the InsuranceSuite brand, the company provides three core systems: BillingsCenter, ClaimsCenter, and PolicyCenter. During the period, shares contributed to performance after the company reported strong fiscal second quarter results, where revenues and operating profits exceeded analyst estimates. Moreover, strong performance was attributable to ongoing cloud traction as the company continued to see large cloud momentum across tier-1 and tier-2 carriers. Management also raised gross margin guidance by another 200 basis points for the full year, approximately 500 basis points ahead of what management projected in October 2022. We believe the company appears well positioned to capitalize on cloud transitions over the long-term.”
03. Kellogg Company (NYSE:K)
Number of Hedge Fund Holders: 40
Kellogg Company (NYSE:K) is a Michigan-based food manufacturing company that produces a wide range of food products. The company reported strong earnings in the first quarter of 2023 with revenue of $4.05 billion, up 10.4% from the same period last year. Year-to-date, its operating cash flow amounted to over $276 million. On June 26, Kellogg Company (NYSE:K) received an upgrade from Goldman Sachs analysts led by Jason English. The analysts raised their rating on Kellogg Company (NYSE:K) shares from Neutral to Buy and increased their price target from $78 to $83. Following this news, Kellogg Company (NYSE:K) stock experienced a 1.8% increase in recent trading, reaching $66.79. However, it is important to note that the stock has seen a decline of 6.3% so far this year.
02. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 40
UBS analysts, on June 26, upgraded Moderna, Inc. (NASDAQ:MRNA) shares from Neutral to Buy, with a revised price target of $191 per share (previously $221). They believe that Moderna, Inc. (NASDAQ:MRNA) value extends beyond its COVID vaccine. The analysts note that Moderna, Inc. (NASDAQ:MRNA) shares have declined approximately 35% year-to-date and around 75% from their pandemic highs in 2021.
The analysts justify their upgrade for two main reasons. Firstly, they consider the current valuation to reflect the significant risks to COVID vaccine revenues but not the potential of Moderna’s pipeline beyond COVID. Secondly, they highlight positive progress in Moderna’s pipeline, including the development of mRNA vaccines for respiratory syncytial virus (RSV), flu, and cytomegalovirus (CMV).
UBS believes that Moderna, Inc. (NASDAQ:MRNA) potential for mRNA vaccines beyond COVID is undervalued. They specifically identify the CMV vaccine as a major potential driver of upside over the next one to two years. Additionally, they see a substantial market opportunity exceeding $10 billion for Moderna’s RSV vaccines. The analysts estimate that the combination of COVID and RSV vaccines alone adds significant value to Moderna’s stock, with a valuation of $123 per share.
01. The Sherwin-Williams Company (NYSE:SHW)
Number of Hedge Fund Holders: 68
The Sherwin-Williams Company (NYSE:SHW) is an American paint and coating manufacturing company, based in Ohio. In the first quarter of 2023, the company reported an operating cash flow of $88.2 million, mainly driven by higher profits. Due to its strong cash position, the company was able to return $458.2 million to shareholders through dividends and share repurchases.
On June 26, BMO Capital analysts upgraded The Sherwin-Williams Company (NYSE:SHW) from a Market Perform rating to Outperform. The analysts cite a more favorable outlook for demand in the paints and coatings industry as the reason for the upgrade. According to the report, BMO Capital sees potential upside for The Sherwin-Williams Company (NYSE:SHW) due to a fading impact of raw materials in the near-term and indications that the housing market may not be as dire as previously anticipated. As a result of their optimistic view, BMO Capital has raised their price target for The Sherwin-Williams Company (NYSE:SHW) shares to $275 per share, up from the previous target of $269 per share.
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