UBS analyst Radi Sultan downgraded the rating on Confluent to a Hold yesterday, setting a price target of $31.00.
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Radi Sultan has given his Hold rating due to a combination of factors surrounding Confluent’s pending acquisition by IBM. The acquisition, set to be an all-cash deal at $31 per share, is expected to close by mid-2026. This proposed price reflects a valuation of approximately 8x and 7x of the company’s projected revenues for 2026 and 2027, respectively. Despite stable win rates in Confluent’s core streaming business, the feedback on newer products like Flink and Tableflow has been less positive than anticipated.
Additionally, while Confluent is positioned to potentially benefit from generative AI advancements, any significant impact from this is not expected in the near term. Given these considerations, including the likely completion of the acquisition, Radi Sultan has downgraded Confluent’s rating to Neutral from Buy. This decision aligns with the revised price target, which has been adjusted to match the acquisition offer, reflecting the current valuation outlook.
Sultan covers the Technology sector, focusing on stocks such as DigitalOcean Holdings, UiPath, and Confluent. According to TipRanks, Sultan has an average return of 14.0% and a 75.00% success rate on recommended stocks.