Morgan Stanley upgrades Sonos with growth flywheel intact

Morgan Stanley analyst Erik Woodring upgraded Sonos to Overweight from Equal Weight with a price target of $20, up from $17. The analyst believes broader audio market challenges have negatively impacted the stock’s valuation. However, the Sonos growth flywheel remains intact, fiscal 2024 estimates appear “de-risked,” the company’s growth can be revived by a new product category launch as soon as April 2024, and its buybacks accelerating, the analyst tells investors in a research note. The firm sees an attractive valuation, and secular growth narrative for Sonos.