Coupang (NYSE:CPNG) is in focus on Friday, following an upgrade from Credit Suisse. CPNG stock is up 17% on the day after it was upgraded from “neutral” to “buy” and as the analyst said Coupang has a “clearer path to profitability.” Despite the upgrade though, Credit Suisse cut its price target down from $28 to $19. Why the lower price target?
According to the bank, a pullback in consumer spending will limit e-commerce growth. That in turn will limit the industry’s growth — and therefore the company’s growth — which helps explain the big reduction in the price target. On the plus side, the target still implies roughly 33% upside even after accounting for Friday’s rally.
That said, CPNG stock has still performed poorly for the year. Shares are down 50% in 2022 and 68% from the 52-week high, as most growth stocks have been obliterated this year.
Credit Suisse Isn’t Alone on CPNG Stock
On June 29, Morgan Stanley analysts Seyon Park and Kelly Kim initiated coverage of CPNG stock. They assigned an “overweight” rating with a price target of $18. The analysts argued, “We believe Coupang’s dominant position, with its fulfillment and logistics infrastructure, makes it a unique asset which should support further market share gains and generate cash flows.”
Further, “At current valuations we believe Eats, overseas initiatives, and fintech no longer need to contribute visibly, which sets up the stock well as the company needs only to execute on the e-commerce side.”
Credit Suisse and Morgan Stanley are just two of the recent positive analyst initiations. Unfortunately for the bulls, that has done little to help CPNG stock — although it may soothe some egos.
While the stock has performed terribly this year, it has received mostly bullish analyst coverage. In fact, the average price target hovers around $20 to $21, which is above the targets from Morgan Stanley and Credit Suisse.
Looking at the slimmest silver lining, at least CPNG stock is starting off the third quarter on a strong note. Bulls now hope it can continue.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.