Home Editor's Picks Street calls of the week: Upgrades for Dupont, Datadog and NetApp

Street calls of the week: Upgrades for Dupont, Datadog and NetApp

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Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Dupont, Datadog and NetApp.

InvestingPro subscribers always get first dibs on market-moving rating changes.

Monday

U.S. markets closed for Memorial Day.

Dupont

What happened? On Tuesday, Citi upgraded Dupont (NYSE:DD) to Buy with $95 price target

What’s the full story? DD shares exhibited a robust reaction in the 1.5 days following the announcement, rising approximately 3%. The feedback from investors was positive – the prospect of operating as standalone businesses should generate value through targeted growth and portfolio clarity. Additionally, Citi sees potential from an electronics recovery and the easing of destocking in more challenged markets.

The most significant source of resistance lies in valuation, particularly concerning Electronics and then New DuPont (RemainCo). Upon revisiting the Sum of the Parts in the new construct, The analysts’ views are more reflective of solid earnings from electronics over the next 18 months.

Citi sees the potential for more detail on the separation as potential positive catalysts throughout the year.

Buy at Citi means “Buy (1) ETR of 15% or more or 25% or more for High risk stocks.”

How did the stock react? Dupont opened the regular session at $82.44 and closed at $82.08, a gain of 1.18% from the prior day’s regular close.

Mind Medicine

What happened? On Wednesday, well Tuesday after hours, Baird initiated coverage on Mind Medicine Inc (NASDAQ:MNMD) at Outperform with a $27 price target.

What’s the full story? Baird’s optimistic stance is primarily driven by the promising prospects of the company’s lead drug, MM120, a novel form of LSD designed to treat generalized anxiety disorder (GAD). In a pivotal phase 2b clinical trial, MM120 demonstrated a statistically significant improvement in GAD symptoms compared to a placebo. The results are particularly noteworthy as the observed therapeutic effect of MM120 was not only rapid in onset but also sustained over the entire 12-week duration of the study.

The brokerage house’s confidence is further bolstered by the recent decision of the FDA to award Breakthrough Therapy Designation to MM120. This designation is reserved for drugs that show substantial improvement over existing therapies for serious or life-threatening diseases. The fact that MM120’s impact was greater than that of currently approved treatments after just a single dose highlights its potential to be a game-changer in the GAD treatment landscape.

Considering the current market dynamics and the unmet medical needs within the GAD space, Baird views the market opportunity for MM120 as having blockbuster potential. The brokerage house’s analysis suggests that the drug could significantly disrupt the existing market, offering a new and potentially superior treatment option for patients suffering from GAD. This could translate into substantial financial success for the company, justifying the high expectations reflected in the $27 price target

Outperform at Baird means “Expected to outperform on a total return, risk-adjusted basis the broader U.S. equity market over the next 12 months.”

How did the stock react? Mind Medicine surged 6% after hours on Tuesday as the headlines circulate. As of the regular session open Wednesday, Mind Medicine opened at $8.90 and closed at $8.91, a gain of 6.64% from the prior day’s regular close.

Datadog Inc

What happened? On Thursday, BofA upgraded Datadog (NASDAQ:DDOG) to Buy with a $155 price target.

What’s the full story? Datadog, a service that aids organizations in monitoring application and infrastructure performance to ensure high-quality end-user experiences, is seen by the bank as a significant opportunity, estimated to be worth $53bn. The robust platform of Datadog, which boasts 22 products, is particularly appealing to spend consolidators and those seeking cutting-edge technology.

Furthermore, BofA anticipates that Datadog will consistently deliver a Rule-of-40+ profile, which means 20%+ revenue growth plus 20%+ free cash flow margin. This expectation places Datadog well above the 30% average for the infrastructure peer group, demonstrating the bank’s confidence in Datadog’s potential for sustained growth and profitability.

Buy at BofA means “Buy stocks are expected to have a total return of at least 10% and are the most attractive stocks in the coverage cluster.”

How did the stock react? Datadog opened the regular session at $123.38 and closed at $117.45, a decline of 3.48% from the prior day’s regular close.

NetApp

What happened? On Friday, JPMorgan upgraded NetApp (NASDAQ:NTAP) to Neutral with a $125 price target.

What’s the full story? JPMorgan’s updated perspective is driven by the company’s demonstrated capability to maintain its gross margins in the face of escalating NAND prices. This development stands in contrast to JPMorgan’s initial forecast, which anticipated a decline in margins due to the cost pressures.

In addition to the positive outlook on gross margins, JPMorgan continues to recognize NTAP’s distinct position in the market, particularly in terms of its Cloud services and its leadership in All-Flash Arrays (AFA) for on-premises solutions. However, this is tempered by a perceived lackluster macroeconomic performance when compared to its peers, who are currently experiencing a more immediate surge in demand driven by Artificial Intelligence (AI) advancements.

Neutral at JPMorgan means “over the duration of the price target indicated in this report, we expect this stock will perform in line with the average total return of the stocks in the Research Analyst’s, or the Research Analyst’s team’s, coverage universe.”

How did the stock react? NetApp opened the regular session at $119.75 and closed at $120.43, a gain of 3.73% from the prior day’s regular close.

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