2023-07-11 15:53:18 ET
Shares of Procore Technologies ( NYSE: PCOR ) rose +6.1% on Tuesday after Scotiabank upgraded the construction tech firm to Sector Outperform from Sector Perform, and increased the PT to $80 from $70.
Brokerage's PT of $80 represents a premium of about 23% to last close.
"Our analysis and industry convos (10) give us incremental confidence in PCOR’s macro defensibility and lead us to believe blemishes in the construction end-market surfaced in 1Q are miniscule compared to the broader software space," said Scotiabank.
Brokerage said while it did not expect any impact from Procore's new fintech offerings in 2023, it had received constructive feedback from customer piloting the new tech, and several customers noted a strong likelihood of adopting the new tech in 2024.
While the company's lack of profitability continues to a sticking point for investors, brokerage said it sees an upside to Procore's growth and margin estimates.
Scotiabank noted that while Procore had demonstrated better growth durability compared to peers, its YTD multiple expansion was lower than the peer group.
Scotiabank's Sector Outperform rating contrasts with SA Quant rating of Hold and average Wall Street rating of Buy.
For further details see:
Procore Technologies stock jumps on double upgrade from Scotiabank