3 Stocks Ripe for Upgrades

Tesla Motors Inc (NASDAQ:TSLA), Juniper Networks, Inc. (NYSE:JNPR), and King Digital Entertainment PLC (NYSE:KING) could be on the verge of upgrades

by Alex Eppstein

Published on Aug 5, 2015 at 12:29 PM
Updated on Jun 24, 2020 at 10:16 AM

Analyst ratings provide a nice snapshot of Wall Street's expectations for a given stock. However, sometimes the opinions don't line up with the equity's technical performance -- which is a compelling set-up for contrarians like us. Today, we're going to look at three outperforming-but-underloved stocks that could be ripe for upgrades: electric automaker Tesla Motors Inc (NASDAQ:TSLA), tech firm Juniper Networks, Inc. (NYSE:JNPR), and "Candy Crush" maker King Digital Entertainment PLC (NYSE:KING).

  • TSLA has had a nice run in 2015, advancing almost 20% to trade at $266.74. In recent weeks, the security has found a foothold atop its rising 50-day moving average, which could indicate it's about to make its next leg higher -- especially if the company can top earnings expectations tonight. Despite Tesla Motors Inc's technical tenacity, the majority of covering analysts consider the stock a "hold" or worse. This could pave the way for future upgrades -- and additional upside.

  • JNPR has soared over 27% year-to-date to trade at $28.42 -- just a stone's throw from last month's four-year high of $29.13. In fact, the equity recently gapped higher on upbeat earnings, and has managed so far to shake off its reputation as an August underperformer. Regardless, nearly two-thirds of analysts have doled out tepid "hold" recommendations. Should these skeptics begin to change their tune, Juniper Networks, Inc. could get a boost.

  • Since hitting a 2015 low of $11.96 in late January, KING has been on a roller coaster, mostly to the upside. Specifically, with the shares hovering near $15.61, they've added over 30% since bottoming out. The brokerage bunch has been slow to buy in, however. In fact, over half of the analysts tracking King Digital Entertainment PLC have handed out lukewarm "hold" ratings. Suffice it to say, a future round of upgrades could bolster the stock through recent resistance in the $16 region.

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