What Happened?
Shares of heavy equipment distributor Custom Truck One Source (NYSE: CTOS) jumped 2.6% in the afternoon session after JP Morgan raised its price target on the company's stock to $6.00 from $5.50.
The adjustment reflected a 9.09% increase in the price target for the company. Despite this change, the bank's analyst, Tami Zakaria, maintained an 'Underweight' rating on the shares. This suggested that while the firm saw a slightly higher valuation for the company, it still held a cautious long-term view on the stock's performance.
After the initial pop the shares cooled down to $6.65, up 2.8% from previous close.
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What Is The Market Telling Us
Custom Truck One Source’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 4.3% as a softened tone from President Donald Trump on U.S.-China relations boosted investor sentiment. The positive shift followed a weekend post on Truth Social where Trump stated, "Don't worry about China, it will all be fine!" and expressed a desire to help rather than hurt the country's economy. This statement provided significant relief to markets that had ended the prior week with steep losses. In response, the Nasdaq Composite jumped 2.2%, the S&P 500 gained 1.6%, and the Dow Jones Industrial Average closed 1.3% higher, as investors' fears of escalating trade tensions subsided.
Custom Truck One Source is up 37.5% since the beginning of the year, and at $6.65 per share, has set a new 52-week high. Investors who bought $1,000 worth of Custom Truck One Source’s shares 5 years ago would now be looking at an investment worth $1,529.
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