Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

'Back to the Drawing Board': Zendesk Cut to Equal Weight at Morgan Stanley

Published 13/06/2022, 14:46
Updated 13/06/2022, 14:46
© Reuters.

By Senad Karaahmetovic

Morgan Stanley analyst Elizabeth Porter downgraded Zendesk (NYSE:ZEN) to Equal Weight from Overweight after the company ended its strategic review and decided it will remain independent.

The downgrade call comes as the analyst sees fewer catalysts for shares in the near term.

“We see a key catalyst off the table and downgrade to Equal-weight as we look to for alternative near-term catalysts to drive material upside to shares,” Porter told clients in a note.

The three key factors that pushed the analyst to cut to EW are:

  1. Cheap is not an investment thesis;
  2. Exposure to cyclically sensitive end markets contributes to uncertainty;
  3. FY22 margin outlook implies material 2H ramp in a potentially tough environment.

The price target goes to $80.00 per share from $145.00 to reflect lowered FY22 and out year revenue estimates.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.