In this article, we will take a look at the 10 stocks recently downgraded by analysts. If you want to see some more stocks whose ratings were recently lowered by analysts, go directly to Analysts are Downgrading These 5 Stocks.
U.S. stocks opened lower on Monday, September 19, just ahead of the Federal Reserve’s meeting. Many expect the Federal Reserve to lift interest rates by at least 75 basis points. Analysts believe the expected tightening of monetary policy would further drag down the major stock market indices.
Many sector leaders are already facing the negative effects of inflation. For instance, FedEx Corporation (NYSE:FDX) recently announced disappointing preliminary financial results for its fiscal first quarter and renounced its full-year outlook, citing a slowdown in demand. Subsequently, several research firms turned bearish on FedEx Corporation (NYSE:FDX) following its cautions commentary related to decelerating economic growth.
In addition, analysts also recently lowered their ratings for Adobe Inc. (NASDAQ:ADBE), Huntsman Corporation (NYSE:HUN) and Infosys Limited (NYSE:INFY). Check out the complete article to see why analysts are downgrading these stocks.
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10. Kilroy Realty Corporation (NYSE:KRC)
Number of Hedge Fund Holders: 23
Kilroy Realty Corporation (NYSE:KRC) is a real estate investment trust (REIT) based in Los Angeles. It is primarily engaged in providing premium workplaces to various industries. The company’s shares fell over two percent in pre-market trading Monday, September 19, 2022, after receiving a downgrade.
Citi analyst Michael Bilerman lowered his ratings for Kilroy Realty Corporation (NYSE:KRC) from “Buy” to “Neutral,” citing macro-economic hurdles and slow office recovery. He also pointed towards office rents that are still below pre-pandemic levels.
Bilerman trimmed his price target for Kilroy Realty Corporation (NYSE:KRC) from $60 per share to $50 per share. Kilroy Realty stock has already lost nearly 30 percent of its value so far in 2022.
9. Arrow Electronics, Inc. (NYSE:ARW)
Number of Hedge Fund Holders: 24
Shares of Arrow Electronics, Inc. (NYSE:ARW) slid nearly four percent on Friday, August 16, 2022, after Wells Fargo downgraded the electronic components supplier from “Equal Weight” to “Underweight.”
Analyst Joseph Quatrochi thinks fading demand would further drag down the company’s earnings. Quatrochi also slashed his price target for Arrow Electronics, Inc. (NYSE:ARW) from $125 per share to $87 per share.
Separately, Arrow Electronics, Inc. (NYSE:ARW) last week announced that its board has granted permission to repurchase an additional $600 million worth of its common stock under the existing repurchase plan.
8. Infosys Limited (NYSE:INFY)
Number of Hedge Fund Holders: 24
Two market research firms recently turned bearish on Infosys Limited (NYSE:INFY). The first one is Susquehanna, which lowered its ratings for the Indian tech giant from “Positive” to “Neutral” on Friday, September 16, 2022.
Susquehanna analyst James Friedman expressed concerns over demand challenges surrounding the IT industry. He also pointed towards the lack of big deals and increasing prospects of layoffs. Friedman cut his price target for Infosys Limited (NYSE:INFY) from $29 per share to $20 per share.
Moreover, Goldman Sachs analyst Sumeet Jain also decreased his ratings for Infosys Limited (NYSE:INFY) from “Buy” to “Sell” on Tuesday, September 13, 2022. Jain thinks that decelerating revenue growth is not mirrored in the current valuation of the stock.
7. International Paper Company (NYSE:IP)
Number of Hedge Fund Holders: 27
Shares of International Paper Company (NYSE:IP) plummeted to a new 52-week low of $34.75 on Friday, September 16, 2022, after Jefferies downgraded the pulp and paper company from “Hold” to “Underperform.”
Jefferies analyst Philip Ng thinks a price cut for the fourth quarter is inevitable, considering a sharp drop in orders and excess inventory. Ng also lowered his price target for International Paper Company (NYSE:IP) from $40 per share to $31 per share.
Like International Paper Company (NYSE:IP), analysts also turned bearish on FedEx Corporation (NYSE:FDX), Adobe Inc. (NASDAQ:ADBE) and Huntsman Corporation (NYSE:HUN).
6. Tronox Holdings plc (NYSE:TROX)
Number of Hedge Fund Holders: 29
Shares of Tronox Holdings plc (NYSE:TROX) plunged to a nearly 22-month low on Monday, September 19, 2022. The drop came after BMO Capital slashed its ratings for the titanium products maker from “Outperform” to “Market Perform.”
Analyst John McNulty believes weakened demand and normalized supply chains would negatively impact the prices of Titanium dioxide (TiO2). He also expects Tronox Holdings plc (NYSE:TROX) to face a hard time amid higher energy costs in the near term.
McNulty added that Tronox stock shares won’t be able to outrun the broad group until a considerable drop in energy costs. He also decreased his price target for Tronox Holdings plc (NYSE:TROX) from $21 per share to $16 per share.
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Disclosure: None. Analysts are Downgrading These 10 Stocks is originally published on Insider Monkey.
