While investors should always conduct their own research and consider various viewpoints, targeting stocks with analyst upgrades offers an excellent starting point. For one thing, market participants can leverage valuable intelligence already extracted.
Let’s face it – if we could sit all day and research our next big ideas in a time vacuum, we would. However, the clock doesn’t wait for anyone. Plus, we only have a limited amount of time to get all the things we need done in our lives. Therefore, we need an information accelerant, which stocks with analyst upgrades effectively provide.
With their premium data, resources and extensive acumen, Wall Street’s experts can filter out the high-probability winners from the losers. Considering that thousands of publicly traded securities exist, that right there is a major timesaver. Additionally, those enterprises that enjoy a ratings and/or price upgrade deserve special attention.
Basically, you can’t keep making bad calls and expect to be employed. On that note, below are stocks with analyst upgrades.
Welltower (WELL)
A real estate investment trust (REIT), Welltower (NYSE:WELL) focuses on healthcare infrastructure. Per its website, the company specializes in senior housing, post-acute care, and health systems. For me, the former business unit makes it a compelling idea. With baby boomers retiring en masse every year, Welltower commands a massive total addressable market. In turn, WELL gained over 28% of equity value since the January opener.
Not surprisingly, WELL is one of the stocks with analyst upgrades. In particular, TipRanks notes that Raymond James’ Jonathan Hughes upgraded WELL to a “buy” rating. In addition, the expert forecasts that WELL will reach a price of $101 per share, implying over 17% upside potential. Overall, the average rating is moderate buy with a price target of $90.40.
Notably, at the end of last month, Welltower posted third-quarter funds from operations (FFO) of 92 cents, beating out the analysts’ consensus view of 89 cents. The figure also represents a 9.5% lift from the year-ago quarter’s metric.
Snowflake (SNOW)
A cloud computing-based data cloud enterprise, Snowflake (NYSE:SNOW) primarily offers data storage and analytics services. Experts in the field refer to this business model as “Data as a Service.” As well, Snowflakes features cybersecurity relevancies. Per its website, the company protects enterprises with unified data, near-unlimited visibility and powerful analytics. Since the beginning of the year, SNOW popped up over 18%.
Wall Street’s best like where the company is headed, ranking SNOW as one of the stocks with analyst upgrades. Specifically, Capital One Financial’s Connor Murphy upgraded SNOW to a “buy” with a $195 price target. This assessment implies almost 22% growth potential from last Friday’s close. Overall, analysts peg SNOW as a consensus strong buy with a $193.78 target, projecting nearly 21% upside.
To be sure, when you look at SNOW’s financial ratios – forward earnings, price-to-sales, etc. – they ring as overvalued. However, data breaches have become more sophisticated and thereby more consequential for enterprises. Therefore, Snowflake is worth a look.
Toast (TOST)
A cloud-based restaurant management software firm, Toast (NYSE:TOST) provides all-in-one point of sale systems. Right off the bat, the company presents possible credibility issues. With some evidence pointing to the declining sentiment of revenge travel, it’s possible restaurants might suffer. If so, Toast could see a reduction in its total addressable market. Since the January opener, shares stumbled almost 20%.
What didn’t help matters was an embarrassing policy reversal. Earlier this year, Toast imposed a controversial 99-cent online order processing fee that tagged online orders of $10 or more. Following sharp criticism, management stated that it made the wrong decision and backed off the fee. Still, both investors and users/customers remained displeased.
However, with anticipation that perhaps the worst is over, TOST is now one of the stocks with analyst upgrades. Specifically, Robert W. Baird’s David Koning upgraded shares to “buy” with an $18 price target, projecting almost 28% growth. Overall, TOST carries a moderate buy rating with a $20 target, implying nearly 42% upside.
Fluence (FLNC)
Admittedly, when it comes to wagering on Fluence (NASDAQ:FLNC), investors will be banking on its narrative more so than its financial prowess. And it’s a risky idea. Sure, FLNC gained nearly 6% since the beginning of the year. However, in the trailing month, it slipped about 19%. Also, since making its public market debut in late 2021, the company gave up about 52% of equity value.
However, the company offers significant relevancies in the arena of renewable energy. In particular, its energy storage solutions may allow for grid resilience, an increasingly important topic. As a result, Bank of America Securities’ Julien Dumoulin Smith upgraded FLNC to a “buy” rating. Additionally, the expert forecasts a $26 price target, implying almost 52% upside. Overall, FLNC commands a moderate buy view with a $30.64 target, projecting 79% growth.
As alluded to earlier, Fluence could use some shoring up in its financial stability metrics. However, the main takeaway for FLNC is the underlying revenue growth. On a trailing 12-month (TTM) basis, the company posts revenue of $1.99 billion, up from $1.20 billion in 2022.
Bragg Gaming (BRAG)
Billed as a content-driven iGaming technology provider, Bragg Gaming (NASDAQ:BRAG) offers an attractive profile for stocks with analyst upgrades. It’s a bit difficult to understand what Bragg is about given its word-salad-riddled website. However, iGaming refers to any form of online wagering where a player bets on the outcome of a game/event. It’s a huge market, projected to hit revenue of $153.67 billion by 2030, per Grand View Research.
Subsequently, it appears that Wall Street experts are betting more on the narrative than say the underlying financials. Specifically, JMP Securities’ Jordan Bender pegged BRAG a “buy” with a $8 price target, implying over 67% upside potential. Overall, Bragg Gaming enjoys a unanimous strong buy view with an $11.54 average price target, implying almost 142% growth.
As for those financials, BRAG trades at 25.32x forward earnings, which isn’t really a great deal. However, the revenue performance seems solid. On a TTM basis, revenue of nearly $99 million beats out 2022’s haul of $89.8 million.
Blink Charging (BLNK)
Given the difficulties surrounding the electric vehicle space, it’s not surprising that Blink Charging (NASDAQ:BLNK) – an EV charging infrastructure operator – has suffered in the market. Since the January opener, BLNK plunged 72%. With demand declining and EV inventories rising at dealership lots, the value chain has struggled. Still, BLNK represents one of the stocks with analyst upgrades.
It may seem counterintuitive at first glance. However, as long as EV integration continues to march forward, it’s not of great consequence which EV brand wins out. That might be what Wall Street experts are thinking. Specifically, H.C. Wainwright’s Sameer Joshi reiterated an earlier “buy” rating with a $25 target, thus projecting over 714% upside. Overall, analysts rate Blink a moderate buy with an $8.33 target.
To be sure, not everyone is convinced about BLNK’s bullish trajectory. For example, B. Riley Financial’s Christopher Southern pegged shares a “hold” with a $3 target, implying more than a 2% downside. However, the recovery narrative might be attractive for extreme-value speculators.
Oatly (OTLY)
Easily the riskiest idea on this list of analyst upgrades, Oatly (NASDAQ:OTLY) represents a literal penny stock. Closing last Friday at only 54 cents per share, the bad news doesn’t end there. No, since the January opener, OTLY hemorrhaged more than 73% of equity value. Since making its public market debut in 2021, Oatly incurred a market loss of almost 98%.
That said, the narrative of the Swedish food company producing alternatives to dairy products from oats – including oat milk – may resonate with the new generation of consumers. Per a 2022 consumer survey, 87% of Generation Z respondents remarked that they could be convinced to buy plant-based alternatives. And that may be why Piper Sandler’s Michael Lavery recently assigned OTLY as a “buy” with a $2 target.
Interestingly, analysts overall peg OTLY as a moderate buy with a $2.23 price target, projecting 313% growth. While exciting on the surface level, Oatly isn’t profitable. However, management plans on doubling down on production in existing manufacturing facilities, which may help improve matters.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
