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Data streaming company Confluent (CFLT 1.09%) had quite a good week on the stock exchange, racking up a double-digit increase in its share price. The Monday-Friday stretch saw the specialty tech stock rise by over 12%, according to data compiled by S&P Global Market Intelligence, thanks in no small part to an analyst’s recommendation upgrade.
On Tuesday, Barclays prognosticator Raimo Lenschow jumped into the Confluent bullpen. He changed his recommendation on the stock to overweight, or buy, from his preceding equalweight (hold). The analyst’s price target is $24 per share, suggesting a potential upside of nearly 20%.
While Lenschow expressed concern about what he considers high estimates for American software stocks, he has hope that the environment for these companies will change for the better in the second half of the year. The macroeconomic headwinds — such as the still-worrying inflation indicators — currently buffeting the sector will hopefully subside by then.
The Barclays analyst is a bit more optimistic than some of his peers who track Confluent stock. The same day Lenschow upgraded his recommendation, Truist Securities’ W. Miller Jump took a pair of scissors to his price target. Jump previously flagged it as a $35 stock but now believes Confluent is worth $30 per share.
Yet even after the reduction, that level is still notably above that of Lenschow’s. Jump has maintained his buy on Confluent, believing it to be undervalued and worthy of consideration by careful stock pickers.
In recent days, there have been signs of life in the broader tech sector, with investors returning to numerous titles that have seen significant share price drops. Those worries over the economy aren’t going to melt away, though, so caution and care are warranted for those bargain seekers.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Confluent. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
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