Analysts Shift Gears On New Relic Post-Acquisition: From Outperform To Neutral Ratings And Revised Price Targets

Analysts have mixed reactions to New Relic Inc NEWR acquisition by Francisco Partners and TPG Inc TPG.

Yesterday, NEWR entered into a definitive acquisition deal with an equity valuation of approximately $6.5 billion. 

RBC Capital Markets analyst Rishi Jaluria downgraded New Relic to Sector Perform from Outperform at a reduced rating of $87 from $95.

The analyst slightly revised estimates for revenues and EPS to $1.025.7 million (from $1,025.1 million) and $1.70 (from $1.73) for 2024, and $1,171.7 million (from $1,171.6 million) and $2.10 (from $2.11) for 2025.

Baird and Credit Suisse downgraded the stock to Neutral from Outperform at a lower price target of $87 (from $92) and $87 (from $113), respectively.

Also, BMO Capital Market analyst Keith Bachman decreased the price target to $87 from $88 at a Market Perform rating.

The analyst raised the estimate for revenue and EPS to $1,027 million (from $1,023 million) and $2.10 (from $1.61) for 2024 and $1,157 million (from $1,152 million) and $2.07 (from $2.01) for 2025.

On the other hand, at a Hold rating, Loop Capital raised the price target to $87 from $80 and Truist Securities to $87 from $77. 

Truist Securities analyst Joel P. Fishbein Jr. raised revenue estimate to $1,030 million (from $1,026 million, consensus: $1,025 million) for 2024 and $1,174 million (from $1,150 million, consensus: $1,169 million) for 2025. 

TD Cowen also raised the price target to $87 from $73, maintaining the Market Perform rating.

Price Action: NEWR shares are trading higher by 0.07% at $84.04 on the last check Tuesday.