In this article, we discuss the 5 stocks that recently received price-target cuts from analysts. If you want to read our detailed analysis of these companies, go directly to Analysts Just Decreased Price Targets of These 10 Stocks.
5. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Hedge Fund Holders: 37
Evercore ISI lowered its price target for CRISPR Therapeutics AG (NASDAQ:CRSP) from $66 per share to $60 per share on Thursday, June 23, 2022. The research firm is excited about the gene-editing programs of CRISPR Therapeutics AG (NASDAQ:CRSP), but thinks they are still in the initial stages.
Evercore ISI analyst Liisa Bayko believes that investors can’t get a clear picture of the efficacy of the company’s Type 1 diabetes (T1D) program by the end of 2023. Bayko also downgraded CRISPR Therapeutics AG (NASDAQ:CRSP) from “Outperform” to “In Line.”
4. Burlington Stores, Inc. (NYSE:BURL)
Number of Hedge Fund Holders: 38
Burlington Stores, Inc. (NYSE:BURL) received a price-target cut from Cowen & Co. on Wednesday, June 22, 2022. The research firm trimmed its price target for Burlington Stores, Inc. (NYSE:BURL) from $209 per share to $175 per share, citing the worsening economic condition of low-income customers amid rising inflation.
Low-income households are cutting back on non-essentials due to record inflation. The spending cuts have been hurting the sales growth of leading off-price retailers, including Burlington Stores, Inc. (NYSE:BURL). Cowen also downgraded Burlington Stores, Inc. (NYSE:BURL) from “Outperform” to “Market Perform.”
3. Ameriprise Financial, Inc. (NYSE:AMP)
Number of Hedge Fund Holders: 39
Goldman Sachs slashed its price target for Ameriprise Financial, Inc. (NYSE:AMP) from $325 per share to $270 per share on Friday, June 24, 2022. The research firm also downgraded the Delaware-based financial services company from “Buy” to “Neutral.”
Goldman Sachs analyst Alexander Blostein thinks that market drawdowns can impact the company’s profit mix. Blostein also referred to the dwindling asset management growth of Ameriprise Financial, Inc. (NYSE:AMP). Blostein added that some of the best flowing products of Ameriprise Financial, Inc. (NYSE:AMP) are experiencing performance and capacity challenges.
2. Baxter International Inc. (NYSE:BAX)
Number of Hedge Fund Holders: 45
Wells Fargo decreased its price target for Baxter International Inc. (NYSE:BAX) from $90 per share to $71 per share on Friday, June 24, 2022. The research firm also downgraded the Illinois-based health care company from “Overweight” to “Equal Weight.”
Wells Fargo analyst Larry Biegelsen expects potential weakness in the company’s second-quarter and fiscal 2022 profit and sales. Biegelsen also thinks Baxter International Inc. (NYSE:BAX) is experiencing inflationary pressure amid soaring gasoline prices and supply chain disruptions.
Separately, investment management firm Cooper Investors mentioned Baxter International Inc. (NYSE:BAX) in its third-quarter 2021 investor letter. The fund said:
“During the quarter we exited our position in Baxter, having originally bought in 2017 as a Low Risk Turnaround with clear Stalwart attributes. In essence, the core businesses were highly durable, providing life sustaining or saving medical products such as IV medication or pumps and dialysis machines.
They had been mismanaged prior to the company spinning off its biopharmaceutical business in 2015 which had generated most of the Baxter’s operating profit. With a new CEO in Joe Almeida, who came with a successful track record leading another medical device company (Covidien) we identified three sources of value latency for the new standalone Baxter.
Firstly, optimising the cost structure. Baxter were successful here – they were able to effectively double operating margins from low single digits to mid-to-high teens over a relatively short four-year period. Secondly, accelerating sales growth through a more focused R&D effort. This is inherently more difficult than cost optimisation and on this front success has been muted with only moderate impact to revenues from new product introductions. Finally, capital deployment through Baxter’s significantly under-levered balance sheet. Several smaller bolt-on acquisitions were nicely complementary to the existing portfolio, but in early September the company announced the acquisition of Hil-Rom Holdings, a medical device company with leading positions in bed systems and patient monitoring. The deal is significant at US$12.5bn in size, and exhausts all balance sheet latency in one fell swoop.
Whilst it is “EPS accretive” we believe the high single digit ROIC management are targeting over five years is most reflective of the financial merits of the deal. Put another way, despite visions of providing digital and connected healthcare (think a Baxter IV pump combined with a Hil-Rom smart bed), ultimately the combined entity will likely remain a low-to-mid-single digit grower. Baxter look like they are getting bigger but not necessarily better.
This combination of uncertainty around the merits of the Hil-Rom acquisition and the underwhelming performance on the product development side of the business led us to conclude that the investment proposition today is less attractive relative to other opportunities.”
1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 67
NIKE, Inc. (NYSE:NKE) received a price-target cut from Deutsche Bank on Thursday, June 23, 2022. The research firm lowered its price target for the footwear and apparel retailer from $175 per share to $152 per share.
Deutsche Bank analyst Gabriella Carbone thinks NIKE, Inc. (NYSE:NKE) will miss profit expectations for its fiscal fourth quarter due to weak results in China. Carbone expects NIKE, Inc. (NYSE:NKE) to generate revenue of $1.74 billion from China, below analysts’ average estimate of $1.82 billion.
NIKE, Inc. (NYSE:NKE) is set to report its financial results for its fiscal fourth quarter on Monday, June 27, 2022. NIKE stock has struggled to gain value so far this year. The company’s share price has plummeted about 31 percent on a year-to-date basis.
Earlier this year, investment management firm ClearBridge Investments talked about NIKE, Inc. (NYSE:NKE) in its fourth-quarter 2021 investor letter. Here’s what the fund said:
“Nike is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. Nike is also still underindexed to the women’s category, which we see as a significant ongoing catalyst.”
You can also take a peek at 10 Blue Chip Stocks To Buy According To Billionaire Ken Fisher and 10 Favorite Stocks of Dan Loeb’s Third Point.
