In this article, we discuss 10 stocks that analysts are cutting price targets of. If you want to see some more stocks in this selection, click Analysts Are Cutting Price Targets Of These 5 Stocks.
On March 17, Vincent Reinhart, chief economist and macro strategist at Mellon, joined CNBC’s ‘Squawk Box’ to discuss the Federal Reserve’s decision to hike interest rates. According to Reinhart, the current market shows that major indicators of recession are flaring up, such as the big run-up in energy prices, a flattening yield curve, the Fed moving ahead with policy changes, and the economy at full employment – which usually suggests that a recession is just around the corner. He sees elevated recession risks by 30% to 40% heading into 2023.
“I’m more pessimistic and less than fully invested”
Legendary investor and billionaire Leon Cooperman, the chief of Omega Advisors, discussed markets on March 16, stating that he is less than fully invested, and the Ukraine situation has made him more pessimistic about the market. Cooperman recalled that when he was optimistic about investing, he was long-term bearish since he believed that the economy was following entirely inappropriate fiscal monetary policies, with the labor and commodity inflation being off the charts. He also spoke about the national debt, which rose from $20 trillion in 2017 to $30 trillion in 2021, a debt growth rate far beyond the economic growth of the United States, which again contributes to his pessimistic views.
Amid the market uncertainty, it is important that investors look towards investment advisory firms and pay attention to their stock ratings and price target movements when managing their portfolio composition. Some of the stocks that analysts are cutting price targets of include Roblox Corporation (NYSE:RBLX), JD.com, Inc. (NASDAQ:JD), and The Walt Disney Company (NYSE:DIS).
Our Methodology
All the stocks listed below have had their price targets lowered by an investment advisory in the last two weeks.
Analysts Are Cutting Price Targets Of These Stocks
10. Pinduoduo Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 34
Pinduoduo Inc. (NASDAQ:PDD) is a Chinese e-commerce platform that delivers a range of products, including apparel, food and beverages, electronic appliances, household goods, personal care items, sports and fitness items, and auto accessories.
On March 14, JPMorgan analyst Andre Chang downgraded Pinduoduo Inc. (NASDAQ:PDD) to Underweight from Overweight with a price target of $23, slashed from $105. Although the analyst believes that Pinduoduo Inc. (NASDAQ:PDD) has potential to grow in the Chinese e-commerce market over the years, his analysis of multiple brands in the industry suggests that progress may be limited in the near-term and more sell-off in the Chinese tech sector without valuation support seems to be on the horizon.
Among the hedge funds tracked by Insider Monkey at the end of December 2021, 34 funds reported owning stakes worth $2.65 billion in Pinduoduo Inc. (NASDAQ:PDD), compared to 49 funds in the preceding quarter, holding stakes valued at $3.5 billion in Pinduoduo Inc. (NASDAQ:PDD). Chase Coleman’s Tiger Global Management is the leading shareholder of the company, with 15.7 million shares worth $920.2 million.
In addition to Roblox Corporation (NYSE:RBLX), JD.com, Inc. (NASDAQ:JD), and The Walt Disney Company (NYSE:DIS), Pinduoduo Inc. (NASDAQ:PDD)’s price target was recently cut by analysts.
9. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 39
SentinelOne, Inc. (NYSE:S) is a California-based cybersecurity company using artificial intelligence to prevent and detect threats across an organization’s endpoints and cloud networks.
On March 16, SentinelOne, Inc. (NYSE:S) stock gained 15% after owing to its strong Q4 results and positive FY 2022 guidance. Revenue for the fourth quarter doubled on a year-over-year basis, reaching $65.6 million, driven by a solid mix of new customers, subscription renewals, and upsells. SentinelOne, Inc. (NYSE:S) projects FY23 revenue to fall between $366 million-370 million, compared to the Street consensus of $347.77 million, suggesting year-on-year growth of 80% at the midpoint.
DA Davidson analyst Rudy Kessinger kept a Buy rating on SentinelOne, Inc. (NYSE:S) on March 18, but cut the price target on the shares to $42 from $57, citing lower peer multiples. Although the Q4 results were strong, the company’s operating profit guidance for FY 2023 was well below expectations given its plans for intense growth investments.
According to the fourth quarter database of Insider Monkey, 39 hedge funds were long SentinelOne, Inc. (NYSE:S), up from 35 funds in the prior quarter. Dan Loeb’s Third Point is the largest shareholder of SentinelOne, Inc. (NYSE:S), with 26.7 million shares worth $1.3 billion.
Here is what Third Point Management has to say about SentinelOne, Inc. (NYSE:S) in its Q3 2021 investor letter:
“Our top winners on a percentage basis in Q3 were our two largest positions; (which includes) SentinelOne, up 26%, as public market investors rewarded both companies’ disruptive business models and high-growth trajectories. We expect SentinelOne, Inc. (NYSE:S) to grow rapidly and continue to gain market share over the next decade as flexible work patterns, cloud adoption, and IoT create more security vulnerabilities. This market is still dominated by legacy vendors whose solutions pale when compared to SentinelOne, Inc. (NYSE:S)’s autonomous, machine-learning based security, which is taking share and helping the company grow annual recurring revenue by more than 100% year-over-year.”
8. DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 49
DocuSign, Inc. (NASDAQ:DOCU) is a California-based company offering cloud software that allows users to create and manage digital contracts, in addition to providing e-signature solutions. DocuSign, Inc. (NASDAQ:DOCU) reached its peak during the pandemic, when remote work and education were on the rise.
On March 10, DocuSign, Inc. (NASDAQ:DOCU) reported earnings for the fourth quarter of 2021. The company posted a GAAP loss per share of $0.15, missing estimates by $0.07. Revenue over the period jumped 35% year-over-year to approximately $581 million, topping market predictions by $19.23 million.
JMP Securities analyst Patrick Walravens on March 11 lowered the price target on DocuSign, Inc. (NASDAQ:DOCU) to $180 from $307 but kept an Outperform rating on the shares. The analyst noted that DocuSign, Inc. (NASDAQ:DOCU)’s revenue growth in Q4 2021 came in at 35%, down from 42% in the previous quarter, and the billings growth of 25% came down from 28%. He does remain positive on the stock despite its 38% decline year-to-date, since DocuSign, Inc. (NASDAQ:DOCU) is the “clear leader” in e-signature and it has an unpenetrated market opportunity of $50 billion.
A total of 49 hedge funds were long DocuSign, Inc. (NASDAQ:DOCU) in Q4 2021, down from 51 funds in the prior quarter. The total stakes held in Q4 amounted to $2.85 billion. Fisher Asset Management is the biggest shareholder of the company, with more than 3 million shares worth close to $465 million.
Here is what Longleaf Partners Fund has to say about DocuSign, Inc. (NASDAQ:DOCU) in its Q4 2021 investor letter:
“When we step back and look at the stocks that we do not own, we feel better than ever because finally too much ardor for these market favorites is making many of them fall harder. This began happening this year in the small cap world, as first the SPAC market cooled off, then the IPO (initial public offering) market began cooling as well. We have now seen things changing for larger cap favorites like DocuSign, Inc. (NASDAQ:DOCU) falling over 40% in a day after a quarter that wasn’t all that bad, because it must be truly GREAT when you are trading near 20x revenues. This has led to a narrowing of market leadership yet again, with five large tech stocks essentially driving the S&P 500.”
7. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 57
Oracle Corporation (NYSE:ORCL) is a Texas-based company that provides enterprise information technology and cloud software services to businesses worldwide. On March 10, Oracle Corporation (NYSE:ORCL) declared a quarterly dividend of $0.32 per share, payable on April 21, to shareholders of record on April 8.
Oracle Corporation (NYSE:ORCL) published its Q4 results on March 10, posting an EPS of $1.13, below consensus estimates by $0.05. The $10.51 billion revenue surpassed estimates by $3.01 million.
Stifel analyst Brad Reback lowered the price target on Oracle Corporation (NYSE:ORCL) to $83 from $87 and kept a Hold rating on the shares on March 11, after the company delivered “mixed” results for the December quarter. The revenue for Oracle Corporation (NYSE:ORCL) seems to be stable, but there is no strength in its new database business, which will make it harder to increase sales consistently above a mid-single digit rate, the analyst told investors in a research note.
According to Insider Monkey’s Q4 data, 57 hedge funds were long Oracle Corporation (NYSE:ORCL), up from 56 funds in the earlier quarter. First Eagle Investment Management owns the biggest stake in Oracle Corporation (NYSE:ORCL), with 25.7 million shares worth $2.24 billion.
Here is what ClearBridge Large Cap Value Strategy has to say about Oracle Corporation (NYSE:ORCL) in its Q3 2021 investor letter:
“While the information technology (IT) sector in the benchmark stalled amid rising rates, our holdings outperformed in relative terms, helped in part by a strong quarter from Oracle, the dominant provider of on-premise database software for large enterprises globally and an increasingly viable cloud competitor. Solid quarterly results, raised guidance, healthy underlying metrics and an attractive valuation contributed to strong performance during the period.”
6. HubSpot, Inc. (NYSE:HUBS)
Number of Hedge Fund Holders: 58
HubSpot, Inc. (NYSE:HUBS) is a Massachusetts-based company that delivers a cloud-based customer relationship management platform, serving mid-market B2B companies.
The company posted its Q4 earnings on February 10, announcing a GAAP loss per share of $0.35, exceeding estimates by $0.01. The $369.31 million revenue was up 46.51% year-over-year, outperforming market consensus by $11.79 million.
On March 15, Wells Fargo analyst Michael Turrin slashed the price target on HubSpot, Inc. (NYSE:HUBS) to $675 from $725 owing to multiple contractions in the broader software sector, but he kept an Overweight rating on the shares.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 58 funds reported owning stakes worth $2.47 billion in HubSpot, Inc. (NYSE:HUBS), up from 48 funds in the previous quarter, holding stakes in HubSpot, Inc. (NYSE:HUBS) valued at $2.8 billion. Royce & Associates is a prominent shareholder of HubSpot, Inc. (NYSE:HUBS), with 335,772 shares worth $28.2 million.
HubSpot, Inc. (NYSE:HUBS) was on the radar of analysts in the last week, just like Roblox Corporation (NYSE:RBLX), JD.com, Inc. (NASDAQ:JD), and The Walt Disney Company (NYSE:DIS).
Here is what ClearBridge SMID Cap Growth Strategy has to say about HubSpot, Inc. (NYSE:HUBS) in its Q3 2021 investor letter:
“Performance among our cohort of IT and Internet companies was mixed, with enterprise software makers thriving while more consumer-oriented stocks faced headwinds. HubSpot, Inc. (NYSE:HUBS) saw greater utilization of its marketing software by small and medium size businesses. We are attracted to the recurring revenue nature of these software companies that are increasingly delivering their products on a subscription basis through the cloud. Software business models also tend to avoid many of the inflationary issues facing companies with a physical product or service.”
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Disclosure: None. Analysts Are Cutting Price Targets Of These 10 Stocks is originally published on Insider Monkey.
