Analysts Are Cutting Price Targets of These 10 Stocks

In this article, we will discuss the 10 stocks whose price targets were recently trimmed by analysts.

U.S. stocks inched higher on Wednesday morning after the latest wholesale prices data indicated a potential drop in inflation. The data showed that wholesale prices in the U.S. decreased 0.5 percent in December, against the consensus forecast calling for a 0.1 percent drop. The positive data sent all three major U.S. indices into the green territory after the opening bell today. However, later in the day, equities paired gains and markets closed in the red. Part of the reason why the markets fell was St. Louis Fed President James Bullard’s comments, who, during an interview with The Wall Street Journal, said that the Fed should keep rapidly raising interest rates.

Meanwhile, notable stocks, including Wells Fargo & Company (NYSE:WFC), Bank of America Corporation (NYSE:BAC) and Tesla, Inc. (NASDAQ:TSLA), came into the spotlight after receiving price-target cuts from analysts.

Wells Fargo & Company and Bank of America Corporation received the price-target cuts following their recent earnings. On the other hand, BofA revised its price target for Tesla, Inc., citing demand concerns and headwinds like intensifying competition.

Check out the remaining article to see some other stocks whose price targets were recently cut by analysts.

10. Boston Properties, Inc. (NYSE:BXP)

Number of Hedge Fund Holders: 29

Boston Properties, Inc. (NYSE:BXP) is best known for its premier workplaces across major cities in the U.S.  Its tenants include the U.S. government and famous enterprises like Salesforce.com and Biogen. Its portfolio also has some residential and retail properties.

The Massachusetts-based real estate investment trust (REIT) recently received a price-target cut from Truist. The research firm lowered its price target for Boston Properties, Inc. from $85 per share to $82 per share on Tuesday, January 17.

Truist analyst Michael Lewis expects a drop in rents in the company’s core markets over the next couple of years. Lewis believes the decline will impact the key operations of Boston Properties, Inc.. Nevertheless, the analyst kept his “Hold” rating for the stock.

9. AutoNation, Inc. (NYSE:AN)

Number of Hedge Fund Holders: 33

Morgan Stanley recently turned bearish on AutoNation, Inc. (NYSE:AN), citing rising interest rates and decreasing vehicle prices. Analyst Adam Jonas downgraded the automotive retailer from “Equal-Weight” to “Underweight” and trimmed his price target for AN stock from $104 per share to $96 per share on Tuesday, January 17.

Jonas thinks dropping prices and affordability factors would weigh on the business of AutoNation, Inc.. He was also partially moved by the disappointing financial performance of used-car retailer CarMax last month.

Last week, Wells Fargo also downgraded AutoNation, Inc. from “Overweight” to “Equal-Weight,” citing normalizing gross margins and falling prices.

8. First Republic Bank (NYSE:FRC)

Number of Hedge Fund Holders: 39

Maxim analyst Michael Diana slashed his price target for First Republic Bank (NYSE:FRC) from $200 per share to $185 per share on Tuesday, January 17.

While Diana acknowledged the bank’s better-than-expected Q4 results, he pointed towards a drop in its net interest margin. The analyst also reduced his 2023 earnings expectations to $6.65 per share from $7.50 per share, citing lower net interest margin growth.

First Republic Bank released its fourth-quarter results on Friday, January 13. The bank reported earnings of $1.88 per share, down 6.9 percent over the year-ago period but above expectations of $1.80 per share. The quarterly revenue of $1.4 billion was also in line with the consensus.

However, its net interest margin for Q4 stood at 2.45 percent, down from 2.71 percent in the prior quarter.

7. Chipotle Mexican Grill, Inc. (NYSE:CMG)

Number of Hedge Fund Holders: 45

Morgan Stanley trimmed its price target for Chipotle Mexican Grill, Inc. (NYSE:CMG) from $1,847 per share to $1,664 per share on Tuesday, January 17.

Analyst Brian Harbour thinks limited sales catalysts would affect the stock’s performance this year. Harbour also downgraded Chipotle Mexican Grill, Inc. from “Overweight” to “Equal-Weight.”

Like Chipotle Mexican Grill, Inc., analysts also recently slashed their price targets for Wells Fargo & Company, Bank of America Corporation and Tesla, Inc..

6. Illumina, Inc. (NASDAQ:ILMN)

Number of Hedge Fund Holders: 49

Canaccord analyst Kyle Mikson decreased his price target for Illumina, Inc. (NASDAQ:ILMN) from $330 per share to $300 per share on Tuesday, January 17. The research firm was primarily moved by Illumina’s disappointing outlook for 2023.

Illumina, Inc. recently projected earnings in the range of $1.25 – $1.50 per share for fiscal 2023, well below analysts’ average estimate of $2.67 per share. In addition, the biotechnology company expects sales growth between 7 – 10 percent for the same period, against the consensus estimate calling for a 10 percent growth.

Separately, investment management firm Ensemble Capital Management also talked about Illumina, Inc. in its 2022 annual investor letter, stating:

“Illumina, Inc. (NASDAQ:ILMN) (5.17% weight in the Fund): Illumina’s stock price declined 44.87% during the Fund’s fiscal year, detracting 2.01% from relative performance vs the S&P 500. In addition to extraordinary strength in the US dollar detracting from growth in their significant foreign revenue, as well as COVID lockdowns limiting sales in China, the company’s already closed acquisition of the cancer test maker GRAIL was thwarted by European Union After paying approximately $8 billion to acquire GRAIL despite EU regulator’s warning that the deal may violate antitrust rules, Illumina will likely need to divest their ownership of the company taking a loss of nearly $4 billion as estimated by the company.”

5. Cloudflare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 53

Content delivery network Cloudflare, Inc. (NYSE:NET) went public in September 2019 after pricing its shares at $15 apiece. The stock achieved massive gains during the first year following its IPO. It hit an all-time high of about $220 in November 2021.

However, Cloudflare, Inc. shares have been dropping since then. It is currently trading at a price of around $46. The company recently came into the limelight after receiving a price-target cut from Piper Sandler.

The research firm lowered its price target for Cloudflare, Inc. from $58 per share to $46 per share on Tuesday, January 17. Analyst James Fish revised the estimates for the cloud automation software segment ahead of earnings.

4. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 77

Pfizer Inc. (NYSE:PFE) shares slid nearly four percent on Tuesday, January 17, after Wells Fargo downgraded the pharmaceutical giant from “Overweight” to “Equal Weight,” citing near-term headwinds. The research firm also reduced its price target for PFE stock from $54 per share to $50 per share.

Analyst Mohit Bansal expects an earnings down-revision cycle in the near term. Bansal also pointed towards margin pressure on Pfizer’s key segments amid elevated spending on new launches. Nevertheless, the analyst expressed optimism over the growth prospects of Pfizer Inc. in the long term.

Separately, investment management firm Diamond Hill Capital also shared its views about the growth outlook of Pfizer Inc. in its third-quarter 2022 investor letter. Here’s what the firm said:

“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”

3. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 77

Jefferies downgraded Wells Fargo & Company from “Buy” to “Hold” on Tuesday, January 17, citing its latest quarterly performance and muted outlook for the full year. The research firm also slashed its price target for WFC stock from $49 per share to $46 per share.

Wells Fargo & Company recently delivered mixed results for the fourth quarter. The bank earned 67 cents per share, significantly lower than $1.38 per share in the year-ago period but marginally above expectations of 66 cents.

Revenue for the quarter slipped 5.7 percent on a year-over-year basis to $19.66 billion. However, the numbers missed analysts’ average estimate of $19.98 billion.

Discussing the results, CEO of Wells Fargo & Company,  Charlie Scharf, said in a statement:

“Though the quarter was significantly impacted by previously disclosed operating losses, our underlying performance reflected the progress we are making to improve returns. Rising interest rates drove strong net interest income growth, credit losses have continued to increase slowly but credit quality remained strong, and we continue to make progress on our efficiency initiatives.”

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88

BofA lowered its price target for Tesla, Inc. from $135 per share to $130 per share on Tuesday, January 17. Analyst John Murphy believes the company is facing multiple headwinds, like intensifying competition. Murphy also pointed towards demand concerns amid Tesla’s latest decision to cut vehicle prices.

Tesla, Inc. reduced the prices of its top-selling models in China earlier this month. The electric vehicle giant seems to be benefitting from the move. According to the latest data compiled by China Merchants Bank International (CMBI), the company’s average daily sales in China between January 9 – January 15 skyrocketed 76 percent on a year-over-year basis.

1. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 97

Shares of Bank of America Corporation slipped nearly two percent on Tuesday, January 17, after Piper Sandler turned bearish on the banking giant.

Analyst R. Scott Siefers downgraded Bank of America Corporation from “Neutral” to “Underweight” and slashed his price target for BAC stock from $36 per share to $33 per share. Siefers was primarily moved by the potential pressure on the company’s net interest income (NII) outlook.

The price-target cut came just days after the company released its Q4 results. Bank of America Corporation reported earnings of 85 cents per share, beating the consensus of 77 cents. The quarterly revenue of $24.66 billion also surpassed the expectations of $24.33 billion.

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This article is originally published at Insider Monkey.