Tech stocks have been some of the most beaten up over the past couple of quarters, and analysts are getting to the point where they are asking if enough is enough. As a result, this is becoming more of a stock-pickers market, and analysts are lining up on opposite sides of the trade, depending on particular tech companies. One major Wall Street brokerage firm is adjusting its coverage universe for a handful of these stocks, and some are offering big upside.
J.P. Morgan has issued a few calls with a focus on tech stocks, specifically networking and hardware. All of the calls are fairly positive, but a few got knocked down a couple of pegs in the coverage universe.
Samik Chatterjee was the leading analyst on the calls, and he is taking a “defensive stance” with his networking and hardware coverage universe as he sees increasing signs of the challenging macro feed into demand trends. Chatterjee recommends investors look for diversification away from higher risk areas like enterprise spending, as well as auto exposure, relative to “more resilient capex spend” from cloud customers as well as telco/cable customers. He increasingly expects smartphones and TVs to cycle past trough sentiment, with a rebound likely in the outyear driven by replacement cycles.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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J.P. Morgan upgraded Amphenol Corp. (NYSE: APH | APH Price Prediction) to Overweight from Neutral and has an $83 price target. That implies upside of 29% from the most recent closing price of $64.17. The stock traded around $69 early Wednesday, in a 52-week range of $61.67 to $88.45. Shares are down over 25% year to date.
Chatterjee upgraded CDW Corp. (NASDAQ: CDW) from Neutral to Overweight with a $200 price target. That implies upside of 26% from the most recent close at $158.30. The 52-week trading range is $152.15 to $208.71, and shares traded near $169 on Wednesday. The stock is down 22% year to date.
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On Juniper Networks Inc. (NYSE: JNPR), J.P. Morgan raised its Neutral rating to Overweight. The $36 price target implies upside of 29% from the most recent close at $27.98. The stock traded at around $28 on Wednesday, in a 52-week range of $26.12 to $38.14. Shares are down over 21% year to date.
J.P. Morgan’s Overweight rating on Cisco Systems Inc. (NASDAQ: CSCO) dropped to Neutral. The $51 price target implies upside of 19% from the most recent closing price of $42.70. The stock traded around $44 early Wednesday, in a 52-week range of $40.82 to $64.29. Shares are down over 33% year to date.
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Chatterjee downgraded F5 Inc. (NASDAQ: FFIV) from Overweight to Neutral with a $178 price target. The implied upside from the most recent close at $149.39 is 19%. The stock has a 52-week trading range of $142.43 to $249.00, and it traded near $152 a share on Wednesday. Shares are down 40% year to date.
And TE Connectivity Ltd. (NYSE: TEL) was downgraded to Neutral from Overweight. J.P. Morgan’s $134 price target implies upside of 18% from the most recent closing price of $113.52. The stock has a 52-week trading range of $107.12 to $166.44, and it traded near $122 a share on Wednesday. Shares are down 29% year to date.
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