Roku, SolarEdge Among Key Stock Upgrades Investors Should Know Thursday

Stocks were mostly lower on Thursday after a disappointing business forecast from retail giant Walmart (WMT). The S&P 500, which closed at a record high on Wednesday, was down 0.6% late Thursday afternoon, as was the Nasdaq Composite. The Dow Jones Industrial Average traded 1.1% lower.

Below, we look at the biggest analyst upgrades and downgrades of the day.

Roku Earnings Win Over Jefferies Analysts

Streaming platform provider Roku (ROKU) won over at least one bear with last week’s earnings report. Jefferies analysts on Thursday upgraded the stock to “Hold” from “Underperform” and raised their price target to $100 from $55. 

“The bear case has weakened as Roku out-grew many ad peers in the Q, profitability is inflecting, and Roku retains multiple tailwinds to growth in FY25,” the analysts wrote. Those tailwinds, the analysts said, include “strengthening partnerships with Yahoo / Google,” the platform’s potential for higher fill rates versus peers, and “management’s commitment other than cost discipline.”

Jefferies’ new price target implies just 4% upside from Roku’s closing price on Wednesday. For Jefferies to raise their target further, “Roku will likely have to outperform its guide and give investors confidence these are not one-time benefits.”

SolarEdge Catches 1 Upgrade, 2 Downgrades

SolarEdge Technologies (SEDG) got an upgrade to “Equal-weight” and a 64% price target boost from Morgan Stanley on Thursday. 

The analysts cited management’s recent decisions to shutter its unprofitable battery storage business and enforce headcount reductions as evidence of their commitment to improving profitability and free cash flow. Those efforts should help the company avoid issuing new equity to cover nearly $350 million of debt coming due in September, the analysts said.

The analysts acknowledged that SolarEdge faces a “long and potentially bumpy road ahead…given the unstable demand outlook for residential solar, particularly in Europe, coupled with heightened competition in the region.” But the absence of imminent negative catalysts and a likely improvement in free cash flow supported their decision to upgrade the stock and lift their price target from $11 to $18, about 8% below the stock’s closing price on Wednesday.

Not everyone on Wall Street agrees with Morgan Stanley. Northland Capital and BMO Capital Markets both downgraded SolarEdge to “Underperform” on Thursday. Both firms have assigned the stock a $15 price target.  

SolarEdge shares were down nearly 11% Thursday afternoon. 

Other Notable Rating Changes

Other stocks that saw analyst updates Thursday included Lam Research (LRCX), which Susquehanna upgraded to “Positive” from “Negative.” The firm also lifted its price target by 67% to $125, nearly 40% above the stock’s closing price Wednesday. 

NXP Semiconductors (NXPI) stock was upgraded to “Buy” by Citigroup analysts, who also boosted their price target by 33% to $290. 

BTIG Research upgraded shares of Snowflake (SNOW) to “Buy” and reiterated their $220 price target, implying 18% upside from Wednesday’s close. 

Among stocks that received downgrades on Thursday were chemicals company Celanese (CE), which plummeted yesterday after the company warned demand challenges are likely to persist in the near term. RBC Capital Markets downgraded the stock to “Sector Perform” and slashed their price target by 33%. 

Axon Enterprise (AXON) had its rating from Craig Hallum downgraded to “Hold,” but the firm maintained its $625 price objective. Axon shares slid from an all-time high yesterday after a downgrade from Northcoast Research, which cited growing competition from one-time Axon partner Flock Safety. Shares have also been weighed on by anticipation that its growing business with the federal government could be jeopardized by expected cuts to military spending. As of Thursday afternoon, Axon stock was down more than 25% from Tuesday’s record close.