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 WebMD Health Corp. (NASDAQ: WBMD ) rallied 5% today after Stifel upgraded the online health-information specialist from hold to buy.
So what: Along with the upgrade, analyst Steven Rubis planted a price target of $60 on the stock, representing just 20% worth of upside to yesterday's close. So, while contrarian traders might be turned off by WebMD's price strength during the past year, Rubis' call could reflect a sense on Wall Street that its growth prospects still aren't fully baked into the valuation.
Now what: Stifel now sees 10% year-over-year advertising growth in both Q3 and Q4, up from its prior view of 8% and 5% growth, respectively. According to Rubis:
Our current expectation is that 8% y/y advertising growth in 4Q14 will prove conservative should the company report a solid 2Q14 and 3Q14. We believe strong industry macro trends, as well as stability in WebMD specific ad trends, suggests the company will likely report solid 2Q14 results. We look to the company's 3Q14 guidance and possible upward revisions to FY14 guidance on its 2Q14 conference call as further support.
Of course, when you couple WebMD's still-questionable competitive moat with its lofty forward P/E of 45, I'd hold out for a wider margin of safety before betting too heavily on that bullishness.
Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!