What happened
A prognosticator's recommendation upgrade was a key reason why investors piled into real estate tech stock Opendoor Technologies (OPEN 3.38%) on Wednesday. The company's share price rose by over 8% on the day, which was a far better result than the essentially flat performance of the S&P 500 index.
So what
The firm behind the change was Gordon Haskett, which now rates Opendoor stock a hold; previously it tagged the company's shares with an underperform (i.e., sell). Interestingly, Gordon Haskett reduced its price target as it did so, whittling it down to $2.25 per share from the preceding $2.50.
The firm clearly believes at least some American real estate stocks have reached their fair value. It also upgraded online sales portal Redfin to hold from underperform. Similarly it cut its price target on Redfin, to $7 per share from $8.
In Opendoor's case, much of this has to do with stock price movement. Since mid-July the shares have lost nearly 50% of their value. To Gordon Haskett, this means that they are now at a level that more accurately reflects the U.S. housing market's issues.
Now what
While most investors are cheered by analyst upgrades, it's important to remember that Opendoor (and Redin, while we're on the subject of next-generation real estate companies) has only been upgraded to hold.
That's still some distance down from buy, and it's in line with the generally cautious analyst takes on the stock. Collectively, prognosticators tracking Opendoor are expecting a deeper per-share net loss this year against 2022 ($1.31 per share versus $1.09), and a notable decline in revenue.
