Sell Alert: 10 High-Profile Stocks Just Dumped by Top Analysts

Page 3 of 3

4. Fortis (NYSE:FTS)

Market Cap: $30.71 billion

Average Upside Potential: -1%

Number of Hedge Fund Holders: 18

Barclays analyst Michael Lonegan cut Fortis to Equal Weight from Overweight on November 6 while raising the price target to $61 from $56. Lonegan noted that the shares trade at a historical peak two-year forward price-to-earnings valuation with a 35% premium to US peers, and near their historical peak with nearly a 10% premium to Canadian peers. Barclays said Fortis “trades at a peak historical valuation versus peers” and believes its growth prospects are now fully priced into the shares.

The company gave investors plenty of growth to price in. It unveiled a $32.2 billion capital plan for 2027 through 2031 that supports rate base growth of 7.5%, a five-year compound annual rate at a constant US dollar to Canadian dollar exchange rate. The utility also extended its guidance for annual dividend growth of 4% to 6% through 2031.

Third-quarter adjusted earnings per share were $0.92, up from $0.87 a year earlier, and net earnings were $474 million. Over the past five years, Fortis has grown earnings per share 4.66% a year, and its net margin over the past 12 months is 14.35%.

3. BJ’s Wholesale Club (NYSE:BJ)

Market Cap: $13.82 billion

Average Upside Potential: -1%

Number of Hedge Fund Holders: 40

Citi cut BJ’s Wholesale Club to Neutral from Buy on November 6 and also raised its price target to $113 from $111. After the stock’s strong run, Citi sees a more balanced risk/reward, with the shares at about 22 times its fiscal 2027 EPS estimate, above a five-year average of about 19 times. The bank said “there’s a lot of optimism priced into shares at this point.” It added, “We are also concerned that some of the sales strength in the near-term is driven by one-time promotional events,” and it flagged rising competition among warehouse clubs for memberships.

The optimism has support in the numbers. Second-quarter revenues rose 15.7% to $6.23 billion, and comparable club sales rose 11.9%, or 3.1% without gasoline, a measure the company reports both ways. Membership fee income climbed from a year earlier, and adjusted earnings per share rose. BJ’s ended the quarter with a record 8.5 million members and raised its full-year adjusted EPS guidance to a range of $4.60 to $4.80.

For the longer-term case, see our earlier piece on why BJ’s Wholesale Club has been called a good investment.

2. American Water Works (NYSE:AWK)

Market Cap: $29.92 billion

Average Upside Potential: -4%

Number of Hedge Fund Holders: 39

UBS cut American Water to Neutral from Buy on November 6 and raised its price target to $162 from $153. UBS noted that the stock has risen about 21% since its late-May low while the Dow Jones Utility Index was flat, and said “upside is now insufficient to support a Buy rating.” It sees a more balanced risk-reward ratio of 1.2 to 1 and describes its estimates as in line with consensus. A possible post-closing sale of Peoples Gas or renewed interest in ESG investing could provide upside, while a closing delay on the Essential Utilities merger is the main downside risk.

American Water reported adjusted earnings per share of $2.00 in the third quarter, up from $1.89 a year earlier, and narrowed its 2026 adjusted guidance to $6.07 to $6.12 per share. It also initiated 2027 standalone guidance and said its $3.7 billion capital investment plan for 2026 is on track.

On the merger, regulators in Kentucky, Ohio and Virginia have given approvals, and settlements in Pennsylvania, North Carolina and Texas still need commission approval. The company expects to close by the end of the first quarter of 2027.

1. Essential Utilities (NYSE:WTRG)

Market Cap: $13.02 billion

Average Upside Potential: -6%

Number of Hedge Fund Holders: 40

UBS cut Essential Utilities to Neutral from Buy on November 6 while raising its price target to $49 from $47. UBS noted that the stock has risen 22% from its late-May low, while the Dow Jones Utility Index was flat and the S&P 500 rose 1.5%. It said a post-closing sale of Peoples Gas or renewed interest in ESG investing could provide upside, and it named a closing delay as the primary downside risk, with the merger with American Water potentially five months from closing at the end of the first quarter of 2027.

The company earned $0.36 per diluted share in the third quarter, up from $0.33 a year earlier. Net income was $103.8 million, up from $92.1 million, and adjusted earnings per share, which leave out merger-related costs, were $0.38.

Essential said it was on track to invest $1.7 billion in infrastructure in 2026. Regulators in Kentucky, Ohio and Virginia have approved the merger, and settlements in Pennsylvania, North Carolina and Texas still need commission approval. UBS also cut American Water, its merger partner, to Neutral from Buy the same day.

READ NEXT: Essential Utilities (WTRG) Keeps Growing While Profits Quietly Slide and What Is American Water Works (AWK)’s Economic Moat, and Is It Widening or Narrowing?

Follow Insider Monkey on Google News.

Page 3 of 3