The week's 5 biggest analyst moves: Alibaba stock red-hot on Goldman upgrade

Among this past week's most significant analyst rating changes, Alibaba was stamped with Conviction Buy at Goldman and CarMax was cut at JPMorgan. Here are all of this past week's most significant analyst rating changes, and insights behind the moves, all covered first on InvestingPro. Sign up for comprehensive, rapid-fire coverage of market-moving analyst-rating shifts.

Alibaba upgraded

As the week began, Goldman Sachs added Alibaba (NYSE:BABA) stock to their Conviction Buy List, citing a belief that the "worst is behind us after two years of downward earnings revisions."

After InvestingPro's real-time alert on the move, Alibaba shares opened the U.S. regular session at $112.24 before taking a beating down to a $108 handle during the opening 30 minutes. This 30-minute window is when market makers and ETF managers are positioning for the day. Volatility surges - as is known to the mathematicians behind some of the brilliant algorithms we see trading - and they do what is within accessible practice to achieve best execution.

From that $108 level before 10 a.m. ET, Alibaba shares rose over the next six hours to close the regular session at $110.99, a rebound of roughly 2.8%. Shares climbed 6.4% for the week.

A note regarding Goldman's Conviction Buy List - this specific list, per the firm's disclosure, is compiled as follows: "Each region manages Regional Conviction lists, which are selected from Buy rated stocks on the respective region’s Investment lists and represent investment recommendations focused on the size of the total return potential and/or the likelihood of the realization of the return across their respective areas of coverage. The addition or removal of stocks from such Conviction lists are managed by the Investment Review Committee or other designated committee in each respective region and do not represent a change in the analysts’ investment rating for such stocks."

Norwegian Cruise Line rated Underweight

On Tuesday, Morgan Stanley assigned a new analyst to cover Norwegian Cruise Line (NYSE:NCLH), who issued a report on his new model for NCLH with an Underweight recommendation and an $11.50 price target. The monkey wrench in the short term would appear to be the analyst's expectation that "A key component of our cautious view hinges on higher competitive supply limiting net yield growth relative to other areas of travel."

The market did not appear to agree. Shares opened the regular session on Tuesday at $13.38 and never looked back the entire week, gaining daily to end the week at $15.63.

CarMax slips on downgrade

An easy company to pick on these days is CarMax (NYSE:KMX), and JPMorgan agreed in their downgrade of the stock to Underweight on Wednesday.

JPMorgan noted CarMax merely appears to have an "unfavorable" risk/reward offering. The analyst expressed some respect for the used-car vending machine company, writing, "We believe KMX is likely to be a long-term share gainer in the used car market and see investments over the last 3 years ultimately bearing fruits."

Subsequently, order books were dominated by offers from traders, beginning at Tuesday's close of $67.41 all the way down to Wednesday's opening price of $66. Shares were trading at $65 as of Friday's close.

Okta wobbles on trader talk

Okta (NASDAQ:OKTA) was an oddball on Thursday: Right on the open, traders circulated comments from a boutique research outlet, Cleveland Research, known for their channel checks (that is, gathering information from the company's clients). Comments like these tend to circulate in chat rooms and across newsroom incoming "tip" emails - and are purposefully vague so the scalp traders sharing the intel have action to find opportunities in the stock.

In this case, Cleveland Research was said to have commented, "Fundamentals Appear to be Underperforming Identity Category - some Concerns from Source Code Hack." Thursday morning's open became Okta's bottom for the week, as after 9:30 a.m., another channel-check research outlet named Gordon Haskett noted, "the stock should be on 13-F watch for an activist, although the dual-class structure makes it a hard target. Some 10-Q risk factor changes were noted as well," according to InvestingPro and StreetInsider.com. Certainly an intriguing and rapidly unfolding set of developments.

Okta gained even more ground Friday and ended the week at $69.76, nearly even vs. its Monday open.

Caterpillar upgraded

To end the week, Caterpillar (NYSE:CAT) was upgraded to Buy at Bank of America. BofA offered a five-bullet-point succinct summation of their thesis: "1. Low risk of notable EPS decline Q4/Q1 given price vs cost tailwind; 2. Backlog falls yet lead indicators improve 2H; 3. 2023: trough EPS in a recession year higher vs expectations; 4. 2024+: as investors look to a ‘new economic cycle’, CAT’s EPS power attractive; 5. 2022 events underscore secular pressure abating."

Caterpillar shares gained a cool 1% on Friday following a surge from $247 Wednesday midday to Thursday's close at $255.09. Shares ended the week at $258.46.