Sonos stock gains after Bank of America upgrade

Shares of Sonos Inc. SONO, +4.51% are up more than 4% in Thursday morning trading after Bank of America analyst John Babcock upgraded the stock to buy from neutral and raised his price objective to $18 from $17.50. Babcock views the company as well managed and sees room for the company to exceed September-quarter expectations.

The company “continues to have several products on backorder including its Arc and Sub products that were just launched in June, suggesting still strong demand even as backlogs are off peak levels,” he wrote. “Separately, we believe the stock’s reaction to Apple’s decision to remove third-party speakers from its website was overdone.” In general, Babcock is upbeat about resilient spending in home-related categories, which could benefit Sonos. The stock is near flat over the past three months as the S&P 500 SPX, -0.15% has risen about 7%.