Wolfe Research upgraded SNOW to "outperform"
Snowflake Inc (NYSE:SNOW) stock was last seen 3% higher at $193.50 in pre-market trading, after Wolfe Research upgraded its rating to "outperform" from "peer perform" with a price target of $235. The analyst cited improving consumption trends, a better competitive environment among hyperscalers, and strong product momentum ahead of the cloud company's fourth-quarter earnings on Feb. 26.
Fresh off its seventh consecutive weekly gain, SNOW already boasts a 21.5% year-to-date lead. The equity has added 48.9% over the last three months, with a major boost stemming from a mid-November post-earnings bull gap that saw it gain 32.7%. Snowflake stock is now trading at its highest level since February 2024.
While most analysts are already bullish on the shares, there's still room for some pessimism to unwind. Specifically, 10 brokerages maintain a "hold" or worse rating, and the stock could see additional upside if these firms adjust their outlooks higher.
Snowflake stock doesn’t typically perform well after earnings, with its massive mid-November gain being an exception. The stock closed lower in six of the past eight post-earnings sessions, including a 14.7% drop in August. SNOW has averaged a 14% move in either direction over the past two years, though options traders are pricing in a slightly smaller-than-usual 13.6% swing this time.