Piper downgrades Unity to Underweight on ‘little margin for error’

Piper Sandler downgraded Unity to Underweight from Neutral with a price target of $35, up from $20. The stock rose 35% in one month and 43% in 2023, which leaves “little margin for error,” the analyst tells investors in a research note. The firm, however, enters 2024 with a higher degree of optimism for application software based on stabilizing demand fundamentals after two years of moderation, a declining interest rate backdrop, and new secular tailwinds for cloud and data driven by a generational shift to artificial intelligence.