Seeking Alpha contributors Julian Lin and Millennial Dividends have downgraded Robinhood Markets (NASDAQ:HOOD) and Microsoft (NASDAQ:MSFT) respectively, citing unsustainable valuation premiums compared to industry peers.
On the positive side, Madison Square Garden Entertainment (NYSE:MSGE) and Apple (NASDAQ:AAPL) received upgrades from analysts who see improved growth visibility and strategic initiatives offsetting previous concerns, signaling potential inflection points for these companies.
Upgrades
- Madison Square Garden Entertainment Corp. (NYSE:MSGE): Upgrade Hold to Buy by Eleceed Capital. The upgrade reflects strong FY26 bookings already secured, plans for a new residency to replace Billy Joel’s concerts, and robust consumer spending trends. “The FY26 event calendar is recovering faster than expected, a new residency provides long-term visibility, and consumer spending strength is a lot better than I expected. At 15x forward EBITDA, which is in line with historical averages, I have a share price target of ~$55/share using consensus FY28 adj. EBITDA estimates. I am upgrading MSGE to a buy rating.”
- Apple Inc. (NASDAQ:AAPL): Upgrade Strong Sell to Hold by Bay Area Ideas. The analyst cites multiyear high revenue growth, notable rebounds in Greater China and iPhone sales, and significant U.S. manufacturing investments that help address tariff concerns. “Key results such as Greater China sales and iPhone sales showed notable improvement, and both the top and bottom line saw acceleration from Q2. As discussed just a moment ago, the outlook for the company now appears to be much less murky than before with U.S. manufacturing investments and a potential AI partnership. As a result, the company still seems to have a path to a bright future.”
Downgrades
- Robinhood Markets, Inc. (NASDAQ:HOOD): Downgrade Hold to Sell by Julian Lin. The analyst believes Robinhood’s explosive growth and profitability are unsustainable, with transaction-based revenue likely to face cyclical headwinds despite recent momentum. “The stock’s valuation indicates that investors expect the good times to continue, but I expect cyclicality to negatively impact growth rates in a big way. With the stock trading at an unjustifiably large premium to peers, I am downgrading the stock to a sell rating.”
- Microsoft Corporation (NASDAQ:MSFT): Downgrade Hold to Sell by Millennial Dividends. Despite strong cloud performance and a solid long-term outlook, the analyst sees the current valuation of 36.5x earnings as too stretched compared to a fair value range of 28-32x. “Microsoft’s Q4 FY25 were a blowout thanks to strong Azure growth, despite the capacity-constraints. I expect Q1-Q2 FY26 may be a similar success story, yet it doesn’t justify to be buying Microsoft’s shares at elevated valuation of P/E 36+… Even being a different business altogether, you are better off standing on the sidelines, waiting for another dip as we’ve seen in March-April this year.”