Investing.com – Here’s your Pro Recap of the top takeaways from Wall Street analysts over the past week: upgrades for Dupont, Datadog and NetApp.
InvestingPro customers always get first dibs on market-moving rating changes.
Monday
US markets are closed for Memorial Day.
DuPont
What’s up? On Tuesday, Citi upgraded Dupont (NYSE: ) to Buy with a $95 price target
What is the full story? DD shares showed a strong reaction in the 1.5 days after the announcement, rising about 3%. Feedback from investors is positive – the prospect of operating as an independent business should generate value through growth targets and portfolio clarity. In addition, Citi sees potential from electronic recovery and reduced destocking in more challenging markets.
The most important source of resistance is price, especially in Electronics and then New DuPont (RemainCo). After re-examining the number of Parts in the new construction, the analyst’s view further reflects solid earnings from electronics in the next 18 months.
Citi sees the potential for more detail on the separation as a potential positive catalyst for the rest of the year.
Buy at Citi means “Buy (1) ETR 15% or more or 25% or more for high-risk stocks.”
How do stocks react? Dupont opened the regular session at $82.44 and closed at $82.08, a 1.18% gain from the previous day’s regular close.
Mind Medicine
What’s up? On Wednesday, as well as Tuesday after hours, Baird initiated coverage on Mind Medicine Inc (NASDAQ: ) at Outperform with a $27 price target.
What is the full story? Baird’s optimism is mainly driven by the prospect of the company’s lead drug, MM120, a novel form of LSD designed to treat generalized anxiety disorder (GAD). In a pivotal phase 2b clinical trial, MM120 showed a statistically significant improvement in GAD symptoms compared to placebo. These results are significant because the observed therapeutic effects of MM120 not only started quickly but also persisted throughout the 12 weeks of the study.
The brokerage house’s confidence is further supported by the recent FDA decision to grant Breakthrough Therapy Designation to MM120. This designation is reserved for drugs that demonstrate substantial improvement over existing therapies for serious or life-threatening diseases. The fact that MM120’s impact is greater than that of currently approved treatments after just one dose highlights its potential to be a game-changer in the GAD treatment landscape.
Considering the current market dynamics and unmet medical needs in the GAD space, Baird sees the market opportunity for MM120 as a potential blockbuster. The brokerage house’s analysis suggests that the drug could disrupt the existing market, offering new and potentially superior treatment options for patients suffering from GAD. This could translate to great financial success for the company, justifying the high expectations reflected in the $27 price target
Outperform at Baird means “It is expected to outperform on a total return, risk-adjusted basis the broader US equity market over the next 12 months.”
How do stocks react? Mind Medicine rose 6% after hours on Tuesday as headlines spread. In the regular session open on Wednesday, Mind Medicine opened at $8.90 and closed at $8.91, a gain of 6.64% from the previous day’s regular close.
Datadog Inc
What’s up? On Thursday, BofA upgraded Datadog (NASDAQ: ) to Buy with a $155 price target.
What is the full story? Datadog, a service that helps organizations monitor the performance of applications and infrastructure to ensure a high-quality end-user experience, is seen by the bank as a significant opportunity, estimated to be worth $53bn. Datadog’s robust platform, which has 22 products, is particularly attractive to consolidating spenders and those looking for advanced technology.
Furthermore, BofA anticipates that Datadog will continue to deliver a Rule-of-40+ profile, which means 20% + revenue growth plus 20% + free cash flow margin. This expectation puts Datadog above the 30% average for its infrastructure peer group, reflecting the bank’s confidence in Datadog’s potential for sustained growth and profitability.
Buying in BofA means “Buy stocks expected to return at least 10% in total and are the most attractive stocks in the coverage cluster.”
How do stocks react? Datadog opened the regular session at $123.38 and closed at $117.45, down 3.48% from the previous day’s regular close.
NetApp
What’s up? On Friday, JPMorgan upgraded NetApp (NASDAQ: ) to Neutral with a $125 price target.
What is the full story? JPMorgan’s updated outlook is driven by the company’s demonstrated ability to maintain gross margins as NAND prices rise. This development differs from JPMorgan’s initial forecast, which expected a decline in margins due to cost pressures.
In addition to the positive outlook on gross margins, JPMorgan continues to recognize NTAP’s distinct position in the market, particularly in terms of Cloud services and its leadership in All-Flash Arrays (AFA) for on-premise solutions. However, it is hampered by poor macroeconomic performance compared to its peers, which are currently experiencing a faster surge in demand driven by advances in Artificial Intelligence (AI).
Neutral at JPMorgan means “during the duration of the price target indicated in this report, we expect this stock to perform in line with the average stock price in the Research Analyst, or Research Analyst team, coverage universe.”
How do stocks react? NetApp opened the regular session at $119.75 and closed at $120.43, a 3.73% gain from the previous day’s regular close.
