Morgan Stanley upgrades AppLovin to "overweight" despite bearish stance

Brokerage Morgan Stanley upgrades marketing platform AppLovin APP.O to "overweight" from "equal weight", trims PT to $350 from $470

New PT still represents 27.3% upside to the stock's last close

Brokerage notes that APP has consistently outperformed the in-app advertising market since '23

APP is well-positioned to outperform due to its strong foundation, which includes high exposure to direct response budgets, a history of innovation-driven outperformance in its end market, and robust fundamentals and valuation support -Morgan Stanley

Brokerage believes the company's non-gaming advertising product has started strong, particularly in e-commerce, and is expected to drive significant revenue growth

"We lower our estimates and price target to account for greater macro uncertainty and our bear case now assumes a consumer-led recession in 2025"- Brokerage

22 out of 27 brokerages rate the stock "buy" or higher, 4 rate "hold", 1 rate "sell" and median PT is $535 as per LSEG data

Including session's moves, APP stock down 15.1% YTD