Analysts Are Downgrading These 5 Stocks

In this article, we discuss the 5 stocks receiving downgrades from analysts. If you want to see more such stocks on the list, go directly to Analysts Are Downgrading These 10 Stocks. 

5. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 43

Baird lowered its ratings for Caterpillar Inc. (NYSE:CAT) from “Buy” to “Hold” on Tuesday, February 14. Analyst Mircea Dobre thinks the company’s shares are approaching a cyclical pivot point after their recent outperformance.

Dobre added that the factors driving CAT shares are becoming headwinds for the stock. The analyst also cut his price target for Caterpillar Inc. (NYSE:CAT) from $290 per share to $230 per share, citing valuation risk.

4. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 48

Argus downgraded Emerson Electric Co. (NYSE:EMR) from “Buy” to “Hold” on Tuesday, February 14. The research firm referred to the near-term headwinds besides pointing towards the latest earnings miss.

Emerson Electric Co. (NYSE:EMR) last week announced disappointing financial performance for its fiscal first quarter. The industrial conglomerate earned 78 cents per share on an adjusted basis, missing the consensus of 87 cents. In addition, the quarterly sales of $3.37 billion also fell below the expectations of $3.43 billion.

The company primarily took a hit from supply-chain hurdles and semiconductor shortage. These factors didn’t let Emerson Electric Co. (NYSE:EMR) fully capitalize on the solid demand for automation.

Nevertheless, Emerson Electric Co. (NYSE:EMR) raised its 2023 sales growth outlook to a range of 8 – 10 percent, compared to its previous growth projection between 7 – 9 percent.

3. Marriott International, Inc. (NASDAQ:MAR)

Number of Hedge Fund Holders: 51

Evercore ISI trimmed its ratings for Marriott International, Inc. (NASDAQ:MAR) from “Outperform” to “In-Line” on Wednesday, February 15. Analyst Duane Pfennigwerth acknowledged the company’s latest earnings beat.

However, Duane said he is moving to the sidelines considering the stock’s recent outperformance, as Marriott shares have jumped about 22 percent on a year-to-date basis and rose nearly 32 percent since his coverage in July 2022.

Earlier this week, Marriott International, Inc. (NASDAQ:MAR) reported adjusted earnings of $1.96 per share for the fourth quarter, beating estimates of $1.83 per share. The quarterly revenue of $5.92 billion also exceeded the consensus of $5.37 billion.

2. Fidelity National Information Services, Inc. (NYSE:FIS)

Number of Hedge Fund Holders: 60

Citi downgraded Fidelity National Information Services, Inc. (NYSE:FIS) from “Buy” to “Neutral” on Tuesday, February 14. The research firm was primarily moved by the company’s decision to spin off its merchant business Worldpay.

Analyst Ashwin Shirvaikar called the decision a “potential lost opportunity.” Shirvaikar also cut his price target for Fidelity National Information Services, Inc. (NYSE:FIS) from $85 per share to $70 per share.

Separately, investment management firm Diamond Hill Capital also briefly discussed Fidelity National Information Services, Inc. (NYSE:FIS) in its Q4 2022 investor letter, stating:

“In addition to SVB Financial and V.F. Corporation, we eliminated our positions in financial services technology company Fidelity National Information Services, Inc. (NYSE:FIS) and media and technology company Comcast Corporation. Several reasons factored into our decision to sell Fidelity National Information Services, including board and leadership changes, a strategic review, and a cooperation agreement with activist shareholder D.E. Shaw (and discussions with JANA Partners).”

1. CF Industries Holdings, Inc. (NYSE:CF)

Number of Hedge Fund Holders: 65

Scotiabank slashed its ratings for CF Industries Holdings, Inc. (NYSE:CF) from “Outperform” to “Sector Perform” on Tuesday, February 14. Analyst Ben Isaacson pointed towards a sharp drop in urea prices in recent months. Isaacson also cut his price target for CF stock from $118 per share to $100 per share.

Meanwhile, CF Industries Holdings, Inc. (NYSE:CF) posted mixed financial results for the fourth quarter following the downgrade. The fertilizers maker reported earnings of $4.35 per share, topping estimates of $4.30 per share. On the downside, the quarterly revenue of $2.61 billion missed the consensus of $2.84 billion.

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