Shares of ANGI Homeservices (ANGI 9.78%) rose dramatically in early trading on Monday, gaining as much as 18% in the first hour. Although the stock had pulled back from those levels by 11 a.m. EST, it was still up a notable 13%. Thank an analyst price call for the quick move higher to start the new trading week.
ANGI Homeservices helps connect providers of home improvement services (think plumbers and carpenters) with customers who need their help. Early in the coronavirus pandemic, when consumers were afraid of interacting with people for fear of becoming ill, ANGI saw a slowdown. But with people stuck at home and/or working from home, that quickly turned around, and service requests and monetized transactions jumped materially.
By December, however, that boost was clearly starting to wane, suggesting that the uptick might be temporary. So, when the company reported 11% revenue growth in 2020 less than a week ago, there was perhaps an underlying negative floating around.
Today, Citi analyst Nicholas Jones recognized that some headwinds exist for ANGI, but said that the company should be able to do well in a post-coronavirus recovery.
More important, however, the stock's price target was increased from $14 to $19, a roughly 36% jump. The stock closed at $16.25 on Friday, and jumped up to around that $19 price at the early highs today. The stock remains a buy, according to Jones. Investors tend to like when analysts' assign new, higher price targets, so it's not really shocking that the stock rallied as much as it did.
Since April 2020, when the uncertainty surrounding the pandemic was elevated, ANGI Homeservices stock is up around 280%. In other words, a lot of good news is priced in here at this point. Investors should probably take the Citi price upgrade with a grain of salt. It's good news, but the month-to-month trends, which have been slowing down, probably deserve your attention, too.