Coupang(CPNG) Soars 3.64% on Morgan Stanley Upgrade

Coupang(CPNG) shares surged 3.64% today, marking the second consecutive day of gains, with a total increase of 4.29% over the past two days. The stock price reached its highest level since January 2022, with an intraday gain of 4.01%.

The strategy of buying CPNG shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years. The 5-year annualized return was 12.5%, with a maximum drawdown of 11.4%. This indicates a solid performance, especially considering the maximum drawdown, which is relatively low. However, the strategy may not be optimal, as it underperformed the broader market (SPY) in terms of total returns. Investors should weigh the trade-offs between risk and return when considering this strategy.

Morgan Stanley recently named Coupang as its new top pick, maintaining an Overweight rating and raising the price target from $27 to $32. The firm's analysts highlighted Coupang's strong execution, relative immunity to tariff risks, and advantages from a weaker U.S. dollar. Additionally, Coupang reported significant financial growth, with an 11% year-over-year increase in consolidated revenue and a substantial expansion in profit margins. The company generated over $1 billion in free cash flow in the trailing 12 months. Furthermore, Coupang announced a $1 billion share repurchase program, reflecting confidence in its capital allocation strategy. These factors have contributed to positive investor sentiment and a favorable stock outlook.