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 Analysts Are Cutting Price Targets of These 5 Stocks.
During the June meeting of the Federal Open Market Committee (FOMC), central bankers expressed concerns about sustained higher inflation, indicating that interest rates are likely to remain elevated for an extended period. Initially, investors anticipated rate cuts in the coming months, but recent economic data suggest otherwise, including strong consumer spending and a tight labor market. Although the unemployment rate rose slightly to 3.7% in May, it remains historically low, and consumer spending continues to drive the economy. However, the Fed aims to reduce overall spending to moderate demand relative to supply, which can alleviate inflationary pressures. According to Wells Fargo Advisors, the manufacturing sector has experienced a mild recession, with economic indicators showing contraction. The COVID-19 pandemic initially prompted increased online purchases, while service-oriented businesses like restaurants and air travel suffered. Now, as restrictions ease, there is a surge in demand for these services. Although labor market conditions have improved compared to a year ago, wages are rising as employers strive to retain workers. Higher wages contribute to inflationary pressures as companies pass on increased costs to consumers through higher prices. Inflation currently exceeds the Fed’s long-term target of 2%, and the FOMC made it clear that if inflation does not subside in the near future, rate hikes will be implemented. The lack of action during the June meeting may only be a temporary pause in the Fed’s recent hawkish stance on rate increases. Given these circumstances, it is advisable to adopt a defensive investment strategy.
On the currency side, China and Japan are feeling uneasy about the prolonged strength of the U.S. dollar. China, not bound by global agreements on market rates, has responded swiftly this week. State banks in China have sold dollars in an effort to slow down the depreciation of the yuan, and adjustments have been made to the mid-point of daily trade. Japan’s finance ministry is now addressing the situation, with Masato Kanda, a prominent diplomat in charge of yen matters, stating that they are open to considering all available options to address the rapid and one-sided decline of the yen, reported Reuters.
Oil prices continued to rise, and commodities and stocks in Asia experienced a surge in optimism due to the potential for stimulus measures in China. The price of West Texas Intermediate (WTI) crude oil approached $70 per barrel after a volatile session on Monday, which was influenced by a brief uprising in Russia over the weekend. According to Bloomberg, Chinese Premier Li Qiang stated during a forum on Tuesday that the government would introduce additional practical and effective measures to stimulate domestic demand. However, these promises were mostly reaffirmations of previous statements made by officials.
On the stocks market front, analysts are bearish on financial services firms such as The Charles Schwab Corporation (NYSE:SCHW) and JPMorgan Chase & Co. (NYSE:JPM). Also, the diversified entertainment company The Walt Disney Company (NYSE:DIS) is also on the bearish radar of analysts. Check out the complete article to see details of these and other stocks.
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10. Alpha Metallurgical Resources, Inc. (NYSE:AMR)
Number of Hedge Fund Holders: 21
Alpha Metallurgical Resources, Inc. (NYSE:AMR) is a mining company specializing in producing, processing, and selling met and thermal coal. Its primary operations are located in Virginia and West Virginia. The company was established in 2016 and has its headquarters in Bristol, Tennessee. On June 26, B. Riley Securities analyst Lucas Pipes adjusted his rating on Alpha Metallurgical Resources, Inc. (NYSE:AMR). Although maintaining a Buy rating, Pipes decreased the price target for the company from $201 to $197. Alpha Metallurgical Resources, Inc. (NYSE:AMR) operates in the met and thermal coal industry, with operations spanning different business segments. The company operates twenty-four active mines and eight coal preparation and load-out facilities as of December 31, 2022. It was previously known as Contura Energy, Inc. before changing its name to Alpha Metallurgical Resources, Inc. in February 2021.
09. CONSOL Energy Inc. (NYSE:CEIX)
Number of Hedge Fund Holders: 33
CONSOL Energy Inc. (NYSE:CEIX) is an energy company headquartered in Pennsylvania with a rich history dating back to 1864. The company specializes in the production and export of bituminous coal. It operates the Pennsylvania Mining Complex, which includes the Bailey Mine, Enlow Fork Mine, Harvey Mine, and Central Preparation Plant. The complex holds significant coal reserves, with over 657 million tons of proven and probable reserves. During the first quarter of 2023, CONSOL Energy Inc. (NYSE:CEIX) reported a 9.4% increase in coal production, with a focus on exports due to the challenging domestic market conditions caused by low natural gas prices. B. Riley adjusted the CONSOL Energy Inc. (NYSE:CEIX) price target, lowering it from $84 to $81 on June 26.
Greenlight Capital made the following comment about CONSOL Energy Inc. (NYSE:CEIX) in its Q4 2022 investor letter:
“As CONSOL Energy Inc. (NYSE:CEIX) rode a surge in coal prices, the shares soared from $22.71 to $65.00 and the company paid $2.05 per share in dividends. In 2022, part of the higher coal prices were absorbed by hedges and forward contracts at what turned out to be below-market prices. Even so, we believe the company ended the year with no net debt. From here, with the below market contracts mostly behind, we expect the higher prices to translate directly into much higher earnings, with most of the free cash flow to be returned to shareholders. Much of the pricing in 2023 and some of the pricing in 2024 is locked in. As a result, we believe that the company will generate free cash flow over the next two years equal to its current market capitalization. While thermal coal will probably never be cool to own, we believe the returns for owning CEIX should continue to be hot.”
08. Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX)
Number of Hedge Fund Holders: 34
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) is a Cambridge, Massachusetts-based company that is focused on treating neurodegenerative diseases. The company was established in 2013. Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX), Inc. is a biotechnology company that focuses on discovering and developing treatments for amyotrophic lateral sclerosis (ALS) and other neurodegenerative diseases. They specialize in discovering and developing treatments for amyotrophic lateral sclerosis (ALS) and other neurodegenerative diseases. Their main product, RELYVRIO (marketed as ALBRIOZA in Canada), is used for treating ALS in adults in the United States. They are also working on AMX0114, a potential treatment for other neurodegenerative diseases. Citi has reduced the price target for Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX), lowering it from $53 to $48.
07. Arch Resources, Inc. (NYSE:ARCH)
Number of Hedge Fund Holders: 42
Arch Resources, Inc. (NYSE:ARCH) is an American coal mining company headquartered in Missouri. It is a prominent player in processing metallurgical products for the global steel industry within the United States. On April 27, the company declared a quarterly dividend of $0.25 per share, consistent with its previous dividend payout. Additionally, Arch Resources, Inc. (NYSE:ARCH) announced a special dividend of $2.20 per share and has been consistently paying supplemental dividends to shareholders for the past five quarters, making it an attractive option for investors seeking special dividend stocks. The company and a few others have seen increased demand following the disruption in the global energy market caused by the Russian invasion of Ukraine. On June 26, B. Riley revised its price target forArch Resources, Inc. (NYSE:ARCH), decreasing it from $198 to $195.
Kingdom Capital Advisors made the following comment about Arch Resources, Inc. (NYSE:ARCH) in its Q4 2022 investor letter:
“Arch Resources, Inc. (NYSE:ARCH), AMR, and PDER benefited from the resurgence of coal, specifically metallurgical coal pricing. In February, we highlighted in a Seeking Alpha article that ARCH appeared dramatically undervalued considering the surging price of coal, and we expected their management team to implement a shareholder-friendly capital return plan which was released shortly thereafter. The stock distributed over $30 of dividends per share in 2022, and significant repurchases of convertible debt and shares further supported the stock price.”
06. Truist Financial Corporation (NYSE:TFC)
Number of Hedge Fund Holders: 48
Truist Financial Corporation (NYSE:TFC) is a banking and trust services provider based in North Carolina. It operates primarily in the Southeastern and Mid-Atlantic regions of the United States. On April 20, the company announced its Q1 financial results, reporting a GAAP EPS (Earnings Per Share) of $1.05. However, this figure fell $0.09 short of analysts’ estimates. Despite the earnings miss, Truist Financial Corporation (NYSE:TFC) revenue of $6.15 billion marked a 15% year-over-year increase and surpassed market expectations by $60 million. However, the stock price of Truist Financial Corporation has experienced a significant decline of nearly 31% year-to-date as of June 26, making it one of the worst-performing members of the S&P 500 in 2023. Citi on June 26 decreased the price target for Truist Financial Corporation (NYSE:TFC), lowering it from $46 to $43.
Here is what Tweedy, Browne has to say about Truist Financial Corporation (NYSE:TFC) in its Q1 2023 investor letter:
“The Funds received very little in the way of return contributions from many of their financial, energy, media, and healthcare holdings. While it would appear that a crisis was avoided by the quick intervention of bank regulators in the US and Switzerland, some uneasiness still remains in the global banking community. This turmoil couldn’t help but have a negative impact on investor sentiment and in turn on Fund bank holdings such as Truist Financial Corporation (NYSE:TFC).”
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Disclosure: None. Analysts Are Cutting Price Targets of These 10 Stocks is originally published on Insider Monkey.
