Cowen raised its rating on Sotheby's shares to outperform from market perform, saying the art auction company offers the most leverage to a potential industry recovery in 2017.
"We upgrade BID. ... We like ongoing modern transformation underway, capital light agency business model, stabilizing margin profile and favorable risk/reward given prospects of an improving art market," analyst Oliver Chen wrote in a note to clients Friday.
"We like demonstrated auction commission margin improvement in addition to improving sell-through statistics. Better sell-through rates indicate that current demand [is] healthy and prospects of acquiring superior inventory may follow."