Earnings season is underway, and that means it’s time for analyst upgrades. It's important for investors to remember that companies don't always wait until their earnings report to deliver guidance. So even though this round of earnings will last into early March, several companies have received bullish analyst upgrades.
By themselves, analyst upgrades should be viewed as one-off events. But when you combine them with other factors, you can understand why these stocks may belong on your watchlist.
Analyst Upgrades Are a Signal That Filters Out Noise
Forty years ago, many would-be investors shied away from picking individual stocks because there wasn't a lot of information, and getting to it was time-consuming. In many cases, the juice wasn't worth the squeeze.
Ironically, today, many investors avoid picking individual stocks because, with a firehose of data available to them and just a click away, they struggle with analysis paralysis. There are too many names to choose from; too many opportunities to chase.
It can get noisy. Analyst upgrades are one way to quiet that noise. Analysts work for banks, hedge funds, and other institutional investors, and have access to information about companies that retail investors do not. That doesn't mean they can't make mistakes, but it does mean that retail investors should pay attention to their analysis, particularly when they forecast a price well above the current price.
When you're looking to find the right stocks among the thousands to choose from, analyst upgrades can be a signal that points you to profitable opportunities.
Rocket Lab (RKLB): Launch Momentum and Analyst Optimism Build Ahead of Earnings
Rocket Lab (NASDAQ: RKLB) is one of the most popular stocks in the emerging space sector. In the last 12 months, RKLB stock is up more than 300%. The company had a record year of launches of its Electron rocket, and as of its last earnings report, it already has a record backlog in place for 2026.
This will also be the year that the company begins launching its Neutron rockets, which can house larger payloads. Rocket Lab also has a growing Space Systems business, which includes spacecraft being designed for NASA's planned Mars missions.
As of Jan. 19, RKLB stock is trading about 33% above its consensus price target. However, on Jan. 16, the stock received a bullish upgrade from Morgan Stanley, which moved the stock from Equal Weight to Overweight and increased its price target to $105 from $67. That's only about 10% above the current RKLB stock price, which suggests that there could be more downside risk before earnings. Opportunistic investors should use that as a dip to buy.
Grab (GRAB): Improving Profitability and AI Expansion Drive Bullish Sentiment
Grab Holdings Inc. (NASDAQ: GRAB) is the parent company of a "super app" for consumers across Southeast Asia. The company's offerings encompass ride-hailing, food and package delivery, and digital payments.
Grab's revenue has been growing strongly year-over-year and that trend is expected to continue in the next four quarters. The company has also delivered four consecutive quarters of positive earnings per share (EPS). That's another trend that's expected to increase in the next twelve months.
One reason to believe in that growth may come from Grab's acquisition of the Chinese company, Infermove. This will allow the company to deploy AI-powered Carri robots in the first mile and last mile of the delivery process. Analysts believe last-mile robotics delivery could be a $20 billion opportunity by 2027.
Like many emerging market stocks, GRAB stock doesn't draw as much analyst attention. However, the sentiment has been bullish over the last three months, including a bullish upgrade from Hold to Buy from HSBC. This increase in analyst sentiment has pushed the stock's consensus price target to $6.58, which would represent a 50% upside from the stock's current level.
BioNTech (BNTX): Oncology Pipeline Progress Sparks Wall Street Upgrade
BioNTech (NASDAQ: BNTX) is part of the biotechnology sector. The German-based company is known for developing next-generation immuotherapies and vaccines. The company burst into the minds of mainstream investors when it partnered with Pfizer Inc. (NYSE: PFE) on its Comimaty vaccine for Covid-19.
However, analysts are bullish on the stock because of the strides that the company has made with its oncology portfolio. The company's pipeline includes drug candidates in late-stage clinical trials, including immunomodulators, antibody-drug conjugates, and mRNA cancer immunotherapies.
BioNTech expects data readouts from seven late-stage trials this year and expects to apply to the U.S. Food and Drug Administration (FDA) for approval of one of its drug candidates. Although the company won't realize any revenue in 2026, it hopes to have multiple revenue-producing candidates in market by 2030.
On Jan. 16, Goldman Sachs upgraded BNTX stock from Neutral to Buy and raised its price target to $142 from $115. Importantly, that price target is above the $140 consensus price, which itself is over 28% higher than the stock's closing price on Jan. 16.
A Final Word on Analyst Upgrades
As is the case with many things in life, there's strength in numbers. A single analyst upgrade may not carry that much weight. But when there's one; there are usually more. And even those analysts don't upgrade the stock; they may reiterate a rating of Buy or its equivalent and raise their price target. That's still a bullish signal for investors because it suggests the stock price is likely to move higher.
However, one important consideration is timing. In many cases, an analyst’s price target is for 12 to 18 months in the future. That makes them less helpful for momentum investors, but it could be an option for swing traders who are looking to take a long position (i.e., holding the stock for more than a year).
