Spotify, Salesforce shares gain following upgrades: 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed today: upgrades at Spotify, Salesforce, Glaukos, and Insulet.

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Spotify gains on Pivotal Research upgrade

Spotify Technology (NYSE:SPOT) shares rose more than 2% pre-market today after Pivotal Research upgraded the company to Buy from Hold and raised its price target to $265.00 from $170.00.

The analysts explained the rationale behind this upgrade, citing several key factors, including:

1. Improved forecasts for EBITDA and Free Cash Flow in the medium to long term, attributed to Spotify's enhanced focus on financial discipline, underscored by their search for a new CFO, and the potential for significant margin expansion;
2. Consistent strong performance and Spotify's capability to increase prices without losing customers significantly;
3. Spotify's apparent dominance in the digital audio streaming market, which supports ongoing growth in both user numbers and average revenue per user;
4. The potential for further growth as Spotify aims to increase its monthly active users from 600 million to 1 billion.

Salesforce raised at Morgan Stanley

Salesforce (NYSE:CRM) shares rose more than 2% pre-market today after Morgan Stanley upgraded the company to Overweight from Equalweight and raised its price target to $350.00 from $290.00, as reported in real-time on InvestingPro.

According to the analysts, the key growth drivers for the company include effective price hikes, innovative solution bundling, and the Data Cloud service for Generative AI applications.

Despite what we see as solid (and improving) positioning for Generative AI, the stock continues to trade at a discount to large cap Software peers on a growth-adjusted GAAP earnings basis ( Exhibit 3 ), with shares trading at a 0.9X PEG ratio against our estimates of a ~33% GAAP EPS CAGR from CY23-CY26. This presents a compelling risk-reward ahead, driving our upgrade to Overweight.

Two more upgrades

JPMorgan upgraded Glaukos (NYSE:GKOS) to Overweight from Neutral and raised its price target to $91.00 from $66.00. As a result, shares surged more than 3% pre-market today.

Looking into 2024, the analysts remain optimistic, citing factors like the higher-than-expected Average Selling Price (ASP) for iDose, growing adoption of Infinite, and LCDs unfavorable to competitor technologies that will ultimately begin benefitting iStent. This positive outlook suggests a strong performance in 2024, likely leading to upward revisions in estimates for 2025 and beyond, along with the potential for significant leverage from new products leveraging the existing sales force.

Baird upgraded Insulet (NASDAQ:PODD) to Outperform from Neutral and raised its price target to $238.00 from $180.00. As a result, shares rose more than 1% pre-market today.

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