5 Stocks Entering June in the Wrong Direction

1. Redwire Corp. (NYSE:RDW)

Redwire dropped for a second day on Monday, losing 15.83 percent to finish at $20.68 apiece, as investors took path from an investment firm’s price target downgrade for its stock amid valuation concerns.

In a market note, Jefferies lowered its rating for Redwire Corp. (NYSE:RDW) to hold from buy, despite raising its price target to $24 from $13 previously.

The new figure marked a 51.6 percent upside potential from its latest closing price.

According to Jefferies, the rating downgrade was due to the company’s threefold and twofold surge on both a year-to-date and a month-on-month basis, which it said was driven mainly by valuation expansion rather than changes in its financial outlook.

It said that the rally appears to have already priced in the company’s growth prospects, leaving limited near-term upside.

Jefferies also noted that Redwire Corp. (NYSE:RDW) still needs to prove its capability of converting its growing order backlog into actual revenues and profits, being unprofitable at present.

In other news, Redwire Corp. (NYSE:RDW) recently secured new orders from the US Army Aviation Center of Excellence (AVCOE) and an unnamed member country of the North Atlantic Treaty Organization (NATO) for its Stalker and Penguin UAS to support their aerial defense capabilities.

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