Today's most important upgrades

Spotify (NYSE: SPOT) shares gained more than 3% intra-day today after it earned an upgrade from Wells Fargo and Atlantic Equities.

Wells Fargo upgraded the stock to Overweight from Equal Weight and raised its target to $180.00 from $121.00, noting that the company’s commitment to margin improvement is picking up pace. “Opex is demonstrating leverage as OI losses improve, and we think SPOT will be break-even in 1Q24. And, this is during an ad recession so podcasting is likely a bit behind,” said the firm.

Meanwhile, Atlantic Equities upgrade the stock to Overweight from Neutral and raised its price target to $160 from $110, noting it believes investors will be heartened to see non-music initiatives finally drive margin expansion. According to the firm, industry Q4 results show that the ad market has now bottomed, driving improved confidence in estimates and multiple expansion.

KeyBanc upgraded Splunk (NASDAQ: SPLK) to Overweight from Sector Weight with a price target of $130.00.

According to the firm, Splunk faces challenges in the competitive SIEM and observability markets, but the combination of pervasive enterprise data/analytics incumbency, on-prem/off-prem diversity, and shift in focus by new CEO Gary Steele to the core security business and improving CF profitability should lead to outperformance in the current environment.

Summit Insights upgraded ON Semiconductor (NASDAQ: ON) to Buy from Hold, stating it expects the stock to outperform its peer group. “While we expect ON to experience some financial headwinds in the near term, we believe ON can outperform the analog market with its unique product positioning in the automotive market and will benefit from the ramp of its 300mm EFNY fab in the medium-to-longer term,” said the firm.

Shares gained more than 4% intra-day today following the company’s reported Q4 results, with better-than-expected EPS and in-line revenues, while Q1/23 guidance came in worse than the consensus estimates. The company also announced a $3 Billion share repurchase program.

Currently, shares are trading 1% lower.

By Davit Kirakosyan

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