Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: Upgrades at Adidas, Redfin, Keurig Dr Pepper, and Hannon Armstrong.
Adidas upgraded to Buy at BofA
According to the bank, the Q2 gross margin beat is the clearest indication so far that the Adidas brand is undergoing a positive change.
"The beat was underpinned by higher full price sell-through, with cyclical tailwinds yet to come. This leaves adidas 1.5ppts away from its 50% mid-term guidance, which we think could now be exceeded (BofA estimate 51%)."
These developments further bolster Bank of America's confidence in the ongoing turnaround of Adidas and its potential for medium-term earnings growth.
The bank also pointed out upcoming potential catalysts, including a potential guidance increase in Q3/23, the launch of new products in the second half of 2023, and Capital Markets Day in 2024.
Redfin upgraded to Perform after a 41% stock drop
Oppenheimer upgraded Redfin (NASDAQ: RDFN ) to Perform from Underperform based on the company’s valuation, with the stock down more than 41% in the last month. However, the firm stated that Redfin's agent-employee model is still in question.
"We believe the shares are fairly valued at their current 26% discount to peers on '24E gross profit,” mentioned Oppenheimer. The firm believes that Redfin positioning agents as full-time employees leaves the company with too many agents in a downturn and not enough to gain market share when the housing market improves.
Two more upgrades
UBS upgraded Keurig Dr Pepper (NASDAQ: KDP ) to Buy from Neutral and raised its price target to $42.00 from $37.00.
"With shares trading below historical averages and at a deep discount to US Beverage peers, KDP is currently pricing in a decline in earnings power over the next twelve months. We view this as misplaced."
BofA Securities upgraded Hannon Armstrong (NYSE: HASI ) to Buy from Neutral and raised its price target to $27.00 from $24.00 driven by the stronger-than-anticipated impact of the Inflation Reduction Act (IRA) tailwinds.
"HASI’s pipeline of investment opportunities has expanded 25% since February to >$5Bn. With strong conversion rates YTD and originations up 20% YoY, we raise our EPS expectations and now sit at the high-end of FY24 guidance."
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