PayPal and Delta jump on upgrades: the week's biggest analyst moves

This week saw some big upgrades, including a fresh Buy rating for PayPal at Truist. Here are all of this past week's most significant analyst rating changes, covered first on InvestingPro. Sign up for comprehensive, rapid-fire coverage of market-moving analyst moves.

On Tuesday, Truist upgraded PayPal (NASDAQ:PYPL) to Buy and boosted their price target to $95.00 from $75.00.

In the note, the firm cited its increased confidence that consensus expectations "are now reasonable," and the analyst suspects nearly $6 billion in net cash offers a flexible option to management for M&A and/or buybacks. The analyst has an above-consensus EPS expectation for 2023 of $5.00 (vs Street at $4.79) and for 2024 of $6.10 (vs. Street at $5.53). No comment on how that may change under new inflation dynamics.

Shares ended Tuesday trading at $74.57, up 4.7% from the previous week's close at $71.24.

On Wednesday, Needham increased their bullish conviction on Etsy (NASDAQ:ETSY), upgrading the name to Buy from Hold with a price target of $160.

The firm highlighted that consensus expectations have normalized a bit "now that pandemic demand has been mostly lapped and sell side estimates are in a good place." The firm believes that positive earnings revisions and improvement on the valuation multiples of EV/sales, along with EV/EBITDA, ought to drive equity asset appreciation.

Etsy traded a low of $112.25 on Tuesday midday and rose slightly on the upgrade, closing Wednesday at $117.13 before gaining more into Friday's close, ending the week at $120.70.

On Thursday, Argus Research upgraded Delta Airlines (NYSE:DAL) to Buy from Hold with a price of $39.00 at 0700 ET.

Scalp traders particularly enjoy the Argus upgrades because they come premarket (which has limited access to retail traders and is highly populated with aggressive professional traders) and volatility can surge, offering rapid moves as headlines emerge from tier 1, 2, and 3 newswires.

And this was a particularly enticing play for scalpers given the popularity of airliners in the U.S. following the Southwest flight delays during the Christmas blizzard of 2022, coupled with Delta announcing impending free wifi for passengers.

Argus wrote, "We expect demand for leisure travel to remain strong in 2023 and look for business travel to surpass 2019 levels."

Shares of Delta closed Wednesday session at $34.39. By Thursday close the equity traded $35.23, a gain of 2.5%.

On Friday, Stifel upgraded MGM Resorts (NYSE:MGM) to Buy from Hold and raised their price target to $46.00 from $42.00, noting the brokerage has a desire to take exposure to Macau, the Las Vegas strip and cruise gambling.

The Stifel analyst and his team are "big believers in the Macau/China reopening trade," see Las Vegas as benefitting from a "strong event calendar," and expect cruise operators "should benefit from strong pent-up demand." They added that they have offsetting worries over pure-play regional gambling operators.

Wall Street likes to call casino plays "gaming" in their research, while some prefer to call it what it is: "gambling."

The Stifel upgrade was circulated heavily among professional trader message rooms and the equity closed Friday at $37.20, up 5.83%.

***

If you’re interested in upgrading your search for new investing ideas, check out InvestingPro