In this article, we will discuss the 10 stocks whose price targets were recently trimmed by analysts. If you want to see more such stocks on the list, go directly to Wall Street Analysts Trim Price Targets for These 5 Stocks.
A series of daily 1% changes in the S&P 500, whether it goes up or down, for an entire week might lead to a situation where the strong rise in US stock prices could face substantial challenges. This insight comes from Nomura’s cross-asset strategist, Charlie McElligott, who has observed that volatility-control funds have significant stock investments. Due to this high exposure, the possibility of a market decline has increased, especially after a period of calm trading over the past few months, reported Bloomberg. If the S&P 500 experiences consistent 1% fluctuations every day for a week, the potential exists for a significant drop in the ongoing upward trend of US stocks. This heightened risk is tied to the exposure of funds that aim to manage volatility, which are closely tied to stock market movements. The upcoming test will be how the market reacts to US inflation figures, which could increase volatility. On August 10, European stock markets experienced an increase in their values. This growth was supported by luxury brands’ positive performance, resulting from China easing certain pandemic-related restrictions. Concurrently, the dollar’s value decreased in anticipation of upcoming U.S. inflation data. This data is significant as it could influence the decisions made by the Federal Reserve regarding its policies.
According to economists surveyed by Reuters, there’s an expectation that consumer price inflation in the United States for July will see a slight uptick to an annual rate of 3.3%. Additionally, the core inflation rate, which excludes the more volatile food and energy sectors, is predicted to increase by 0.2% in July, resulting in an annual gain of 4.8%. History has shown that inflation can persist longer than expected once it becomes high. A former Fed Governor, Richard Clarida, cautions against prematurely declaring success in controlling inflation. The upcoming CPI report is expected to reveal a slowdown in the pace of price increases, but not enough for the Federal Reserve to step back from its efforts to combat inflation. If the Wall Street consensus is accurate, the consumer price index will show a 0.2% monthly increase for July and a 12-month rate of 3.3%. This is notably lower than the 8.5% annual rate reported a year ago. When excluding food and energy, the monthly estimate remains at 0.2%, with a 12-month rate projected at 4.8%. While this seems to be positive news to some extent, various data points suggest that inflationary pressures have considerably eased compared to 2022. Richard Clarida, now an advisor for Pimco, suggests that the Federal Reserve should continue its efforts to combat inflation and avoid premature declarations of success. He emphasized the importance of acknowledging improving data while keeping options open and maintaining the fight against inflation, reported CNBC. Oil prices stabilized on Thursday as investor wariness before U.S. inflation data slightly eased an ongoing price increase due to supply constraints. Brent crude rose by 14 cents to reach $87.69 per barrel as of 0757 GMT, and West Texas Intermediate (WTI) crude inched up by 1 cent to $84.5. Oil prices have risen recently due to Saudi Arabia and Russia extending output cuts. Additionally, concerns about supply have emerged due to the possibility of tensions between Russia and Ukraine in the Black Sea region, which could jeopardize Russian oil deliveries.
On the stock market front, analysts are bearish on media and entertainment conglomerate The Walt Disney Company (NYSE:DIS), energy stock Duke Energy Corporation (NYSE:DUK) alongwith biotech firm Biogen Inc. (NASDAQ:BIIB). Check out the complete article to see details of these and other stocks.
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10. Arvinas, Inc. (NASDAQ:ARVN)
Number of Hedge Fund Holders: 22
Arvinas, Inc. (NASDAQ:ARVN), a company located in New Haven, Connecticut, is working on creating treatments that break down harmful proteins causing diseases. They use a special platform called PROTAC® Discovery Engine to develop targeted protein breakers. These breakers utilize the body’s natural system for removing proteins, helping eliminate disease-causing proteins effectively.
On August 9, Piper Sandler made a notable adjustment to the price target of Arvinas, Inc. (NASDAQ:ARVN), a company within the spotlight of their analysis. This adjustment entails a decrease in the projected price target, which has been revised from its prior value of $81 to a new target of $70. This modification in the price target signals Piper Sandler’s revised assessment of Arvinas, Inc. (NASDAQ:ARVN) potential valuation within the market. The decrease of $11 suggests that Piper Sandler’s experts have re-evaluated their expectations for Arvinas, Inc. (NASDAQ:ARVN) performance, considering various factors that could influence the company’s growth trajectory.
Just like The Walt Disney Company (NYSE:DIS), Duke Energy Corporation (NYSE:DUK), and Biogen Inc. (NASDAQ:BIIB), the sentiment is bearish for Arvinas, Inc. (NASDAQ:ARVN).
09. Bumble Inc. (NASDAQ:BMBL)
Number of Hedge Fund Holders: 29
On August 9, RBC adjusted Bumble Inc. (NASDAQ:BMBL) price target, reducing it from $27 to $23. This shift reflects heightened competition in the advertising market, according to RBC. Despite the target cut, RBC maintains an “Outperform” rating for Bumble Inc. (NASDAQ:BMBL), suggesting optimism about the company’s performance compared to market averages. The change indicates a $4 shift from the previous target and highlights the importance of monitoring market trends for informed investment decisions.
Polen U.S. Small Company Growth Strategy made the following comment about Bumble Inc. (NASDAQ:BMBL) in its Q1 2023 investor letter:
“The most significant detractors from the Portfolio’s relative performance in the quarter included Azenta, Warby Parker, and Bumble Inc. (NASDAQ:BMBL). Finally, Bumble, a leading online dating app known for its strong, women-centric brand, was another detractor. We do not believe the stock’s poor performance is driven by fundamentals, which have remained strong amidst an uncertain economic backdrop. As one measure of this, the Bumble app recently became the most downloaded dating app in key markets such as the US, Canada, Australia, the UK, and Germany—all without a commensurate increase in marketing spend. We believe the stock was weighed down by fears sparked by the poor performance of competitor Match Group, which is experiencing growth challenges as the Tinder platform matures, as well as a pickup in secondary activity from private equity owner selling. We used this volatility to add to our position in Bumble.”
08. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 31
Lyft, Inc. (NASDAQ:LYFT) is a company that offers on-demand ridesharing services. Its success is closely connected to the technology industry, and its future depends on how well it can reduce expenses and make operations more effective. This is crucial as the company’s stock price has dropped significantly, falling from over $70 to around $10.
Stephen Ju, an analyst associated with Credit Suisse, on August 9, upheld his positive “Outperform” rating for Lyft, Inc. (NASDAQ:LYFT), the ride-hailing company. However, he has opted to revise down the projected price target for Lyft, Inc. (NASDAQ:LYFT) shares. Previously set at $23, the new price target stands at $18, as per Ju’s evaluation. This action by Stephen Ju indicates his continued belief in Lyft, Inc. (NASDAQ:LYFT) potential to outperform market expectations. Despite the adjustment in the target price, his overall outlook for the company’s performance remains optimistic. The revised target signifies a decrease of $5 from the previously anticipated value of $23. This adjustment signals a notable shift in Ju’s assessment of Lyft’s potential valuation.
Similar to how The Walt Disney Company (NYSE:DIS), Duke Energy Corporation (NYSE:DUK), and Biogen Inc. (NASDAQ:BIIB) are all experiencing negative sentiment, the outlook is also pessimistic for Lyft, Inc. (NASDAQ:LYFT).
07. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Number of Hedge Fund Holders: 42
Lyft, Inc. (NASDAQ: LYFT) is a company that offers on-demand ridesharing services. Its success is closely connected to the technology industry, and its future depends on how well it can reduce expenses and make operations more effective. This is crucial as the company’s stock price has dropped significantly, falling from over $70 to around $10.
Citigroup revised Willis Towers Watson Public Company’s price target (NASDAQ:WTW) on August 9, now setting it at $221 instead of the previous $251. Despite this adjustment, Citigroup maintains its stance with a “neutral” rating for the company. The decision to lower the price target results from the analysts’ careful evaluation of Willis Towers Watson Public Limited Company (NASDAQ:WTW) performance and the prevailing conditions within the market. This alteration indicates a reduction of $30 from the previously projected value, which signifies Citigroup’s updated perspective on the potential worth of Willis Towers Watson Public Limited Company (NASDAQ:WTW) within the market. While the target has been decreased, the decision to keep a “neutral” rating suggests a cautious approach on Citigroup’s part.
06. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 46
On August 9, Wells Fargo, a notable financial institution, adjusted the target price for Target Corporation (NYSE:TGT). This adjustment involves a reduction in the target price, which has been lowered from its previous value of $165 to the new level of $135. Concurrently, Wells Fargo has opted to maintain its assessment of the stock’s rating with an “Equal-weight” classification. The decision to lower the target price signifies Wells Fargo’s updated analysis of Target Corporation (NYSE:TGT) potential value in the market. This shift in projection by $30 suggests that Wells Fargo’s experts have re-evaluated their expectations for the company’s performance and market positioning. Despite the decrease in the target price, retaining an “Equal-weight” rating suggests a neutral perspective on the stock. This could indicate that Wells Fargo believes Target Corporation (NYSE:TGT) performance might align with broader market expectations without significant outperformance or underperformance.
Smead Value Fund made the following comment about Target Corporation (NYSE:TGT) in its second quarter 2023 investor letter:
“Our biggest detractors were Target Corporation (NYSE:TGT), Warner Brothers (WBD), and Pfizer (PFE). Target was our worst performer in the quarter, primarily driven by customers and public reaction to in-store promotions for the month of June. We believe management has listened to its core customers, made the necessary changes, and avoided structural damage to the brand.”
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Disclosure: None. Wall Street Analysts Trim Price Targets for These 10 Stocks is originally published on Insider Monkey.
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