Recent Seeking Alpha analyst actions highlight significant developments in the investment landscape, focusing on major companies like Chewy, UiPath, Alibaba, and NatWest. Analysts have shown optimism for Chewy (NYSE:CHWY) and UiPath (NYSE:PATH) due to improving strategic initiatives and market positioning, leading to upgrades. Conversely, Alibaba (NYSE:BABA) and NatWest (NYSE:NWG) have been downgraded due to valuation concerns and changing market dynamics, indicating a more cautious outlook.
Upgrades
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Chewy, Inc. (NYSE:CHWY): Upgrade to Buy by Gary Alexander. The analyst highlights Chewy’s accelerating revenue growth, improved margins, and expanded Autoship revenue base as key drivers for the upgrade. Chewy’s strategic expansion into new revenue streams and its ability to maintain resilient growth in a challenging market are considered advantageous.
“In my view, Chewy has become an excellent stock to diversify our growth portfolio into. Chewy benefits from multiple countercyclical demand tailwinds that are driving improved revenue growth, allowing the company to achieve 20%+ adjusted EBITDA expansion.”
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UiPath Inc. (NYSE:PATH): Upgrade to Buy by Uttam Dey. The upgrade is attributed to UiPath’s strategic pivot towards industry partnerships with leading AI players, which is expected to accelerate ARR growth. The analyst notes the company’s alliances with Microsoft, Nvidia, and Google as pivotal moves that enhance its positioning in the AI ecosystem.
“UiPath is banking on its agentic automation product Maestro … partnerships with some of the largest beneficiaries of the AI ecosystem today … I am recommending a Buy rating on UiPath.”
Downgrades
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Alibaba Group Holding Limited (NYSE:BABA): Downgrade Buy to Hold by Daniel Jones. The analyst cites Alibaba’s approach towards fair valuation after a significant rally as the primary reason for the downgrade. Despite growth in AI and cloud computing, heavy reinvestment pressures overall profitability, warranting a cautious stance.
“At the end of the day… I think that the company is much closer to being a fair value play than it is anything else, given the totality of the circumstances.”
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NatWest Group plc (NYSE:NWG): Downgrade to Hold by Labutes IR. The downgrade is driven by the view that NatWest is no longer undervalued after recent gains, albeit still offering a good income pick. Rising operating expenses and pressures from loan loss provisions present challenges to earnings growth despite strong capital returns.
“NatWest is still offering an interesting dividend yield, but its shares are fairly valued right now, limiting potential upside ahead … I think its investment case is currently more geared toward income rather than value.”