In a report released today, Andrew Sherman from TD Cowen upgraded PagerDuty to a Buy, with a price target of $22.00.
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Andrew Sherman’s rating is based on several compelling factors that suggest a positive outlook for PagerDuty’s stock. The primary reason for the Buy rating is the potential acquisition of PagerDuty, as indicated by a recent Reuters article. The company has engaged Qatalyst Partners, known for their successful track record in software mergers and acquisitions, which increases the likelihood of a sale.
Additionally, PagerDuty’s current valuation appears attractive, trading at a low multiple compared to its peers. Despite recent growth challenges, the prospect of a sale provides a significant upside potential, with a revised price target of $22. This potential transaction and the engagement of a reputable advisor make the risk/reward profile appealing, justifying the upgrade to a Buy rating.