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Qualcomm upped to Buy, Twilio raised to Overweight: 4 big analyst picks

Published 01/15/2024, 06:14 AM
Updated 01/15/2024, 06:14 AM
© Reuters — Here is your Pro Recap of the biggest analyst picks you may have missed since Friday: upgrades at Qualcomm, Twilio, International Flavors & Fragrances, and CIENA.

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Qualcomm earns an upgrade at Citi

Citi upgraded Qualcomm (NASDAQ:QCOM) to Buy from Neutral and raised its price target to $160.00 from $110.00, as reported in real-time on InvestingPro. Furthermore, the bank launched a positive catalyst watch on the stock, expecting an upside to Qualcomm's print and guidance when it reports earnings on Jan 31.

The analysts believe that the replenishment of inventory in the handset market will boost Qualcomm's revenue and margins. They anticipate this trend to continue at least through the first quarter of 2024 and expect Qualcomm to increase its market share at Samsung (KS:005930) during this time.

We are raising our F24E revenue and EPS estimates from $37.5 billion and $7.61 to $38.5 billion and $8.16, and our F25E revenue and EPS estimates from $41.0 billion and $8.82 to $41.0 billion and $9.29, respectively.

Twilio raised to Overweight at Piper Sandler

Piper Sandler upgraded Twilio (NYSE:TWLO) to Overweight from Neutral and raised its price target to $82.00 from $75.00.

The analysts highlighted several reasons for the upgrade. Firstly, Twilio's FCF estimates have significant upside potential due to improved execution on profitability initiatives. Secondly, emerging catalysts such as a potential business split, better marketing budgets, cryptocurrency, and capital returns are noteworthy.

Although there are concerns about the 2024 top-line expectations, the analysts noted that revenue seems to be stabilizing with improving inputs and diminishing headwinds in 2024.

Additionally, the current valuation presents a favorable risk-reward balance, offering investors a chance to invest in a top-tier CPaaS company at an average market valuation for this sector.

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Two more upgrades

Jefferies upgraded International Flavors & Fragrances (NYSE:IFF) to Buy from Hold and raised its price target to $112.00 from $73.00.

The analysts noted that the appointment of a new CEO is expected to bring structural improvements to the company. Additionally, a restocking cycle in the ingredients business is anticipated to bolster growth prospects.

Evercore ISI upgraded Ciena (NYSE:CIEN) to Outperform from In Line with a price target of $57.00 (from $52.00), viewing the company as a "premium asset at a discount price."

We are upgrading Ciena to Outperform as we think the recent earnings report has sufficiently reset expectations and enabled a path to beat and raise as we go through FY24.

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