HP upgraded on PC sector recovery, Lyft raised after Q4 beat: 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed today: upgrades at HP, Lyft , Citigroup , and SentinelOne.

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HP earns an upgrade at HSBC

HP (NYSE:HPQ) shares rose more than 1% pre-market today after HSBC upgraded the company to Buy from Hold with a price target of $33.00 (from $30.00), as reported in real-time on InvestingPro.

The bank noted a turnaround in the global PC market, which saw modest growth in Q4/23 (global shipments rose 3% year-over-year) after experiencing declines for seven consecutive quarters. While this growth rate is modest compared to the double-digit percentage increases seen in 2020-2021, the analysts believe it may signal the start of a new upgrade cycle for PCs bought during and before the COVID-19 pandemic.

This shift coincides with the looming end-of-life for Windows 10 in October 2025 and the anticipated introduction of AI-capable PCs to the market, factors that are expected to boost sector demand.

Lyft upgraded following Q4 beat

MoffettNathanson upgraded LYFT (NASDAQ:LYFT) to Neutral from Sell, with a price target of $13.00 (from $7.00). The upgrade comes after Lyft reported Q4 EPS that exceeded expectations. Additionally, the company provided an optimistic bookings outlook that surpassed consensus predictions. Lyft also announced its expectation to achieve positive free cash flow for the first time in 2024 through cost reductions and enhanced competitiveness with Uber (NYSE:UBER). Currently, Lyft shares are up more than 20% pre-market.

To be clear, we are by no means Lyft bulls. The company faces structural insurance cost headwinds, is at the mercy of Uber when it comes to pricing power & take-rates, is unprofitable on a GAAP OI basis for FY24 and FY25, and is expensive versus peers after factoring in SBC. However, it is simply too challenging for us to remain Sell rated with estimates that are now undifferentiated.

Two more upgrades

Piper Sandler upgraded Citigroup (NYSE:C)to Overweight from Neutral with a price target of $63.00 (from $56.00). As a result, shares rose more than 1% pre-market today.

SentinelOne (NYSE:S) shares gained more than 5% pre-market today after BofA Securities upgraded the company to Buy from Neutral with a price target of $35.00 (from $26.50).

Though competition remains intense, our more positive view is driven by our expectations for the near-term pathway to profitability and FCF generation, re-accelerating net new ÅRR growth long-term industry tailwinds, and improving market conditions.

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