5 big analyst picks & cuts: Morgan Stanley trims CrowdStrike ahead of Q2

Here is your Pro Recap of the biggest analyst picks and cuts you may have missed today: upgrades at Forward Air, Zimmer Biomet, and UGI, and downgrades at CrowdStrike and L3Harris Technologies.

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CrowdStrike downgraded at Morgan Stanley ahead of Q2

Crowdstrike (NASDAQ:CRWD) shares fell more than 2% premarket today after Morgan Stanley downgraded the company to Equalweight from Overweight and cut its price target to $167.00 from $178.00 ahead of Q2/24 earnings announcement on Wednesday.

Difficult Numbers Set Up Into Q2 and 2H: Net New ARR (NNARR) is key metric. We expect FQ2 NNARR to come barely inline with consensus $192MM (-12% YoY) and management's implied guidance of $193-$194MM (-11% YoY), as our checks through June were largely stable.

The consensus and management's guidance of low-30% growth in total ARR for fiscal 2024 assumes that there will be a resurgence in NNARR during the second half of the year. Morgan Stanley believes that the consensus forecast for NNARR is overly optimistic at 6% year-over-year growth in Q3 and sees a downside to a 12% growth estimate in Q4.

Forward Air raised to Peerperform 'after big reset'

Wolfe Research upgraded Forward Air (NASDAQ:FWRD) to Peerperform from Underperform, as reported in real-time on InvestingPro.

Since the announcement of the Omni Logistics acquisition on August 10, Forward Air shares have dropped by around 35%. “So after the big reset to the stock and with signs of a bottom with the 13% bounce of the bottom, we're moving back to the sidelines,” mentioned Wolfe Research.

3 more rating changes

Zimmer Biomet (NYSE:ZBH) shares rose more than 1% premarket today after BTIG upgraded the company to Buy from Neutral with a price target of $139.00.

While our upgrade is partly rooted in valuation, we think the sell-off following the CEO transition was a little overdone. This isn't 2017 and ZBH isn't the same company it was back when Bryan Hanson took over. Ivan Tornos takes over a much healthier ZBH at a time when the orthopedic market is strong and ZBH's balance sheet is healthy.

Bernstein downgraded L3Harris Technologies (NYSE:LHX) to Market Perform from Outperform and cut its price target to $210.00 from $239.00.

The firm still expects robust top-line growth for L3Harris, supported by growing backlogs, but mentioned that the problem remains on margins with supply chain issues, inflation on fixed-price contracts, and execution.

UGI (NYSE:UGI) shares rose more than 3% premarket today after Wells Fargo upgraded the company to Overweight from Equal Weight with a price target of $27.00 (from $28.00).

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