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DigitalOcean Stock Plunges 5% After Double Downgrade to Sell by Goldman Sachs

Published 07/13/2022, 09:07 AM
Updated 07/13/2022, 09:17 AM
© Reuters.  DigitalOcean Stock Plunges 5% After Double Downgrade to Sell by Goldman Sachs

By Senad Karaahmetovic

Shares of DigitalOcean (NYSE:DOCN) are down over 5% today after Goldman Sachs analyst Gabriela Borges downgraded by two notches to Sell from Buy.

The downgrade call comes after the “recent datapoints suggest slowing activity in key verticals like crypto/blockchain, web agencies, and technology startups,” Borges explained in a note sent to clients today.

On a more positive note, the analyst sees valuation being supported by “a repurchase and M&A optionality so we think absolute downside is limited.”

Net-net, Borges expects that “DOCN will underperform the rest of our coverage on a relative basis over the next 12 months.”

Elsewhere, the analyst also cut Clearwater Analytics (NYSE:CWAN) to Sell from Neutral, while upgrading CCC Intelligent Solutions (NYSE:CCCS) to Buy from Neutral, and Powerschool (NYSE:PWSC) to Neutral from Sell.

The price target on DOCN goes to $40 per share from $54. The company’s stock was downgraded just yesterday by Morgan Stanley to Underweight with a $45 per share price target.

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