In this article, we will take a look at the 11 stocks recently downgraded by analysts. If you want to see some other companies on the list, go directly to Analysts are Downgrading These 5 Stocks.
Major stocks including Twitter, Inc. (NYSE:TWTR), Splunk Inc. (NASDAQ:SPLK) and NIKE, Inc. (NYSE:NKE) recently received downgrades from notable Wall Street analysts.
Twitter, Inc. (NYSE:TWTR) received a downgrade primarily due to a lack of clarity around its future, while ratings for NIKE, Inc. (NYSE:NKE) were lowered because of its elevated inventories and falling operating income.
Moreover, financial stocks, including Morgan Stanley (NYSE:MS) and Ally Financial Inc. (NYSE:ALLY), also received downgrades from analysts. Check out the complete article to see the reasons behind the revised recommendations for these companies.
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11. Venator Materials PLC (NYSE:VNTR)
Number of Hedge Fund Holders: 8
Shares of Venator Materials PLC (NYSE:VNTR) slid nearly four percent in pre-market trading Thursday, October 6, after UBS downgraded the chemical manufacturing company from “Neutral” to “Sell.”
Analyst Joshua Spector referred to the increasing pressure on Venator Materials PLC (NYSE:VNTR) due to dwindling TiO2 demand, elevated costs and weak cash flow. Spector also trimmed his price target for Venator stock from $2.05 per share to $0.65 per share.
The latest downgrade came after Venator Materials PLC (NYSE:VNTR) issued a business update on its third quarter. The company cautioned that it experienced a significant drop in sales volumes for its TiO2 products across Europe and Asia.
10. Sotera Health Company (NASDAQ:SHC)
Number of Hedge Fund Holders: 16
Shares of Sotera Health Company (NASDAQ:SHC) fell over 11 percent on Wednesday, October 5, after Citi analyst Patrick Donnelly lowered his ratings for the sterilization and lab testing services provider from “Buy” to “Neutral.”
Donnelly was primarily moved by the increasing litigation and financial risk surrounding the company. Sotera Health Company (NASDAQ:SHC) was recently hit by a $363 million penalty over ethylene oxide emissions.
The analyst believes Sotera Health Company (NASDAQ:SHC) could potentially face similar charges in future that could hurt its balance sheet. He also cut his price target for Sotera stock from $25 per share to $9 per share.
9. Silvergate Capital Corporation (NYSE:SI)
Number of Hedge Fund Holders: 23
Shares of Silvergate Capital Corporation (NYSE:SI) slipped over three percent in pre-market trading Thursday, October 6, after Wells Fargo downgraded the bank holding company from “Overweight” to “Underweight.”
Analyst Jared Shaw pointed towards declining volumes in the Silvergate Exchange Network and increasing deposit outflows due to weak crypto prices. Shaw added that continued pressure on the company’s balance sheet is not mirrored in its stock. He trimmed his price target for Silvergate Capital Corporation (NYSE:SI) from $115 per share to $70 per share.
Like Silvergate Capital Corporation (NYSE:SI), analysts also revised their ratings for Twitter, Inc. (NYSE:TWTR), Splunk Inc. (NASDAQ:SPLK) and NIKE, Inc. (NYSE:NKE).
8. CarMax, Inc. (NYSE:KMX)
Number of Hedge Fund Holders: 28
Stephens analyst Daniel Imbro lowered his ratings for CarMax, Inc. (NYSE:KMX) from “Overweight” to “Equal-Weight” on Monday, October 3, citing fading demand trends for used vehicles.
Imbro doesn’t see any significant upside in the near term. Imbro also lowered his adjusted earnings estimates for fiscal 2023 and fiscal 2024 following the company’s recent earnings. Moreover, he cut his price target for CarMax, Inc. (NYSE:KMX) from $105 per share to $64 per share.
The downgrade came just days after CarMax, Inc. (NYSE:KMX) missed profit and sales expectations for its fiscal second quarter. The used vehicle retailer reported earnings of 79 cents per share, missing expectations of $1.39 per share with a big margin. Revenue of $8.1 billion also came in below the estimates of $8.5 billion.
7. AutoNation, Inc. (NYSE:AN)
Number of Hedge Fund Holders: 31
Shares of AutoNation, Inc. (NYSE:AN) inched lower in pre-market trading Thursday after receiving a downgrade from JPMorgan. The research firm cut its ratings for the automotive retailer from “Overweight” to “Neutral,” saying the auto sector is also vulnerable to the current macro challenges.
AutoNation, Inc. (NYSE:AN) is scheduled to post its financial results for the third quarter on October 27. Its rival CarMax, Inc. (NYSE:KMX) recently delivered weak quarterly performance and many expect similar results from AutoNation later this month.
AutoNation, Inc. (NYSE:AN) shares struggled to gain value this year amid elevated inflation and macro uncertainty. The stock is down about 10 percent on a year-to-date basis.
6. DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 37
Morgan Stanley turned bearish on DocuSign, Inc. (NASDAQ:DOCU) on Monday, October 3. The research firm reduced its ratings for the electronic signature company from “Equal-Weight” to “Underweight.”
Analyst Josh Baer thinks intensifying competition and pricing pressure could weigh in on the stock. Baer also pointed towards normalizing demand trends and leadership challenges surrounding the company. He cut his price target for DocuSign, Inc. (NASDAQ:DOCU) from $73 per share to $47 per share.
The downgrade follows the company’s recently announced restructuring program. DocuSign, Inc. (NASDAQ:DOCU) plans to cut 9 percent of its workforce as a part of that plan.
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Disclosure: None. Analysts are Downgrading These 11 Stocks is originally published on Insider Monkey.
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