In this article, we discuss the 5 stocks receiving price-target cut from analysts. If you want to see more such stocks on the list, go directly to Analysts Are Cutting Price Targets of These 10 Stocks.
05. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 54
Autodesk, Inc. (NASDAQ:ADSK) is an engineering and design software provider. Its architecture design software uses artificial intelligence to sift through designs and evaluate structural issues.
On May 23, Citi analyst Tyler Radke revised the target price for Autodesk, Inc. (NASDAQ:ADSK) from $265 to $241 while maintaining a Buy rating on the company’s shares. The analyst believes there is a more cautious outlook for the shares in the near term due to uncertainties in the macro environment and worrisome signals from Citi’s resellers’ survey. The survey indicated the weakest growth in sales and observed growth rates in quite some time. Although the underperformance in Q1 can be attributed to one-off and expected factors, recent data points raise additional concerns, according to the analyst’s research note for investors.
04. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 63
Enphase Energy, Inc. (NASDAQ:ENPH) provides home energy solutions for the solar photovoltaic industry. They specialize in designing, developing, manufacturing, and selling these solutions in the United States and globally. On May 24, Christine Cho, an analyst at Barclays, decreased the price target for Enphase Energy from $248 to $226 and maintained an Equal Weight rating on the company’s shares following the release of their Q1 results. The analyst believes Enphase Energy, Inc. (NASDAQ:ENPH) is well-positioned to capture a larger market share in Europe, particularly in the residential sector.
Aristotle Atlantic Large Cap Growth Strategy made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q1 2023 investor letter:
“Enphase Energy, Inc. (NASDAQ:ENPH) designs, develops, manufactures and sells home energy solutions in the U.S. and internationally for the solar industry. The company is the world’s leading manufacturer of microinverters that convert solar-generated D.C. energy to A.C. energy usable in homes and buildings. Enphase introduced the world’s first microinverter system in 2008 and has expanded its offerings to include battery storage systems and proprietary technologies that provide energy monitoring and control services for solar energy systems. It sells its products and solutions directly to solar system distributors, large installers and strategic partners.
We see Enphase having a substantial market share that is gained through a premium product offering, superior customer service and the development of a large and diverse network of solar installers and distributors. The company’s products and services address a growing residential solar market. Coupling battery backup systems with existing and newly installed residential solar systems could accelerate the company’s revenue and earnings growth over the next several years, in our view. Additionally, commercial and international expansion offer additional revenue and earnings upside. Enphase also plans to expand manufacturing capacity in the U.S. during 2023 to benefit from tax incentives related to domestic production included in the Inflation Reduction Act (IRA).”
03. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 68
Lowe’s Companies, Inc. (NYSE:LOW) is an American retail company headquartered in Mooresville, North Carolina. It primarily sells home improvement products. Some of the products in its stores include hardware, flooring, plumbing, kitchen, and bathroom products.
Argus has lowered the price target for Lowe’s Companies, Inc. (NYSE:LOW) from $290 to $250 but maintains a Buy rating on the company’s shares following its Q1 results. According to the analyst research note issued on May 25, Lowe’s Companies, Inc. (NYSE:LOW) experienced a 5.6% decrease in sales due to lumber deflation, which impacted its top-line performance. However, Argus highlights that Lowe’s is still well-positioned to achieve future earnings growth and gain market share, despite the challenges of tighter monetary policy and reduced consumer discretionary spending. Nonetheless, the firm has revised its estimates for Lowe’s, reducing its FY24 EPS estimate to $13.45 from $13.84 and its FY25 estimate to $15.00 from $15.50.
02. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 81
Citigroup Inc. (NYSE:C) is one of the biggest banks in the US, along with Bank of America Corporation (NYSE:BAC), Wells Fargo & Company (NYSE:WFC), the Goldman Sachs Group, Inc. (NYSE:GS), and JPMorgan Chase & Co. (NYSE:JPM). Janet Yellen, the former Federal Reserve Chairperson and current Treasury Secretary, suggests that Citigroup Inc. (NYSE:C) has the chance to engage in bank mergers amidst the difficult circumstances faced by the industry. While this may lead to an increased concentration of corporate power in the future, it could be seen as a necessary step in the present to confront the prevailing economic uncertainty.
David Konrad, an analyst at Keefe Bruyette, on May 25, reduced the price target for Citigroup Inc. (NYSE:C) from $50 to $48 and maintained a Market Perform rating on the company’s shares. The analyst explains that Citigroup Inc. (NYSE:C) has abandoned the previously planned sale of its Mexico retail bank and intends to pursue an initial public offering (IPO) for the business in 2025. The management’s objective is to optimize shareholder value. However, Keefe Bruyette believes the decision introduces increased execution risk, as the management could not secure a suitable price from a potential buyer. This development also raises concerns about the attractiveness of the underlying assets, as investors had earlier anticipated a strong price and gain for shareholders.
01. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 113
On May 23, Shyam Patil, an analyst at Susquehanna, decreased the price target for Alibaba Group Holding Limited (NYSE:BABA) from $175 to $160 and maintained a Positive rating on the company’s shares. The analyst acknowledges that Alibaba Group Holding Limited (NYSE:BABA) is still encountering challenges stemming from macroeconomic factors and the persistent effects of the pandemic. However, there are signs of improvement in the Chinese macro environment, and the company’s commitment to cost discipline is yielding positive results.
Earlier in May Alibaba Group Holding Limited (NYSE:BABA) posted its fiscal Q4 results. Adjusted EPADS for the fourth quarter came in at $1.56, beating estimates by $0.21. Revenue jumped 2% year over year to $30.32 billion, beating estimates by $410 million.
L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2023 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) (Long +16%) shares performed strongly based on favourable sentiment surrounding China’s re-opening and indications from Chinese authorities that the prolonged restructuring process of Alibaba/Ant Financial was finally drawing to a close. The company remains a high-quality business with leading positions in both eCommerce and Public Cloud. We exited our position in January at around US$116 per share with the shares having rallied more than 90% since their early November lows and our China re-opening catalyst having played out. We subsequently re-entered the position in March with the shares having pulled back and with the company announcing a new organisational and governance structure. Alibaba has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media and Entertainment Group. Each of these groups will be managed independently (separate CEO and board) and have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this announcement is a strong catalyst to unlock the inherent sum-of-the-parts valuation discount in the company.”
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