While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Stratasys, Ltd. (NASDAQ:SSYS) rallied as high as 5% on Monday after JPMorgan upgraded the 3-D printing technologist from neutral to overweight.
So what: Along with the upgrade, analyst Paul Coster reiterated his price target of $125, representing about 17% worth of upside to Friday's close. So while momentum traders might be turned off by the stock's weakness in recent months, Coster's call could reflect a growing sense on Wall Street that Stratasys' prospects are becoming too cheap to pass up.
Now what: According to JPMorgan, Stratasys' risk/reward trade-off is quite attractive at this point. "Growth prospects for SSYS and the broader 3D printing/additive manufacturing space remain compelling in our view, and we believe SSYS is best-in-class pure-play and therefore a core holding for tech growth investors," said Coster. "The threat of new entrants into the space seems to have weighed on investor sentiment, but we believe successful emerging competitors are likely to occupy distinct niches in this large and highly fragmented market." When you couple that upbeat outlook with Stratasys' recent pullback, it's tough to disagree with JPMorgan's upgrade.
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Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.