DigitalOcean (NYSE:DOCN) stock is climbing higher on Friday after the company got an upgrade from Morgan Stanley analysts.
That upgrade has the firm increasing its rating for DOCN stock from an “underweight” rating to an “equal weight” rating. For the record, the analysts’ consensus rating for DOCN shares is “hold” based on 13 opinions.
To go along with that news rating, the firm’s analysts increased their price target for DOCN stock from $30 per share to $36 per share. That represents a potential upside of 2.8% over its prior closing price. However, it’s still below the analysts’ consensus price prediction of $47.58 per share.
What’s Behind the DOCN Stock Upgrade?
Morgan Stanley moved shares of DOCN stock up to an “equal weight” rating as it believes the company’s challenges and opportunities are now priced into the stock. This follows the cloud computing company pushing its $1 billion revenue target back from 2024 to 2025. It also cut its revenue outlook for 2023 two times, Seeking Alpha notes.
As for how this rating is affecting DOCN stock today, only about 184,000 shares have changed hands as of this writing. For comparison, its daily average trading volume is well above that at 1.7 million shares. This makes sense considering the upgrade was neutral instead of bullish.
DOCN stock is up 3.6% as of Friday morning and is up 41.5% since the start of the year.
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On the date of publication, William White 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.
