Parker-Hannafin has 'clear room for multiple expansion': 5 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Parker-Hannafin, Datadog, Quanta Services , ContextLogic, and KT.

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Deutsche Bank upgrades Parker-Hannifin) to Buy

Deutsche Bank upgraded Parker-Hannifin (NYSE:PH) to Buy from Hold late Wednesday with a price target of $506.00 (from $462.00).

Deutsche analysts say they are seeing a couple of compelling shorter-term catalysts ahead and believe the stock is "increasingly becoming a core holding within Industrials for PMs [portfolio managers], and rightfully so - the company has proven its ability to deliver superior operational execution in many macro environments."

They believe this is rooted in the motion and control tech name's "Win Strategy" and in "significant portfolio change over the past decade, which has created better balance in PH's revenue profile (and brought greater secular growth potential)."

Yet the stock trades at a 16% discount vs. peers on its price-to-earnings ratio, Deutsche analysts say - a multiple that they think has plenty of room to expand.

Shares were ticking up 0.4% to $412.30 in after-hours trading after closing the regular session 0.9% higher.

Quanta Services upgraded at Goldman Sachs

Quanta Services (NYSE:PWR) shares rose 2.8% Wednesday after Goldman Sachs upgraded the company to Buy from Neutral with a price target of $211.00, as reported premarket in real time on InvestingPro.

Goldman Sachs suggests that the company's consistent performance and greater exposure to seemingly more resilient customers make the recent share price retreat an attractive entry point for investors.

“We believe that the sell-off following several challenging market headlines have created an opportunity, especially given major customers have reiterated their growth ambitions in renewable spending as well as transmission and distribution projects,” wrote the analysts.

Datadog earns an upgrade at JPMorgan, 'Painful optimization-driven deceleration wave begins to level out'

JPMorgan upgraded Datadog (NASDAQ:DDOG) to Overweight from Neutral and raised its price target to $115.00 from $90.00 after the company posted a strong Q3 beat and raised guidance, which led to a more than 28% stock price surge Tuesday.

JPMorgan noted that global cost optimizations impacting cloud spending are easing, which had slowed Datadog's growth from 83% in early 2022 to 25% today. The analysts highlighted that during yesterday’s earnings call, Datadog said that “optimization activity from some customers may be moderating,” and although still affected by optimizations, the company indicated that both intensity and breadth of recent optimization efforts experienced in recent quarters are moderating.

The analysts foresee the optimization impact leveling off as Gen-AI adoption grows. With 2.5% of its ARR from Gen-AI customers, Datadog is positioned in the top echelon, according to JPMorgan.

Furthermore, the analysts highlighted the strong Q4 start in October, and easy comps on the horizon for the company.

On Wednesday, shares retreated about 2% to $99.99.

Two more upgrades

Loop Capital upgraded Contextlogic (NASDAQ:WISH) to Hold from Sell with a price target of $4.00 (from $6.00) after the company reported its Q3 results and initiated a process to explore a range of strategic alternatives.

BofA Securities upgraded KT Corporation (NYSE:KT) to Buy from Neutral and raised its price target to $17.00 from $15.00.

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