In this article, we discuss the 15 stocks that analysts are cutting price targets of. If you want to skip our detailed analysis of these stocks, go directly to Analysts are Cutting Price Targets of These 5 Stocks.
A post-pandemic economic recovery has been slowed by the rapid spread of the Delta variant of the coronavirus across the globe over the past few weeks, affecting consumer spending on restaurants and travel while also delaying the complete reopening of offices and schools. Supply chain constraints and an increase in demand for goods have also led to product shortages, contributing to inflation – the Consumer Price Index (CPI) rose by 5.3% year-over-year in August – and resulting in growth-related downgrades at the stock market.
The Federal Reserve has dismissed these concerns as transitory, affirming that the government plans to scale back economic support measures designed to keep businesses afloat during the pandemic. However, huge backups at US ports and manufacturing problems in other parts of the world indicate that consumers may not see prices lowered until well into 2022. According to Dana Peterson, an economic expert at non-profit The Conference Board, labor costs and rents are also likely to increase, though their intensity of the hike may vary across the coming months.
In this environment, it is prudent for investors to monitor their portfolios for stocks that may weigh them down. Some of the high-profile stocks that had their price lowered by analysts recently include Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and Wells Fargo & Company (NYSE:WFC), among others discussed in detail below. According to IHS Markit, a business information provider, the US GDP is expected to grow at a 3.6% annual rate in the third quarter, down from a previous estimate of 7.8%.
Our Methodology
With this context in mind, here is our list of the 15 stocks that analysts are cutting price targets of. All the firms listed below have had their price targets lowered by an investment advisory this week.
The hedge sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The list is ranked according to the number of hedge funds having stakes in each firm.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Analysts are Cutting Price Targets of These Stocks
15. MSC Industrial Direct Co., Inc. (NYSE:MSM)
Number of Hedge Fund Holders: 18
MSC Industrial Direct Co., Inc. (NYSE:MSM) is a New York-based firm that makes and sells metalworking maintenance and repair products. It is placed fifteenth on our list of 15 stocks that analysts are cutting price targets of.
On September 27, investment advisory KeyBanc reiterated an Overweight rating on MSC Industrial Direct Co., Inc. (NYSE:MSM) stock but lowered the price target to $91 from $112. Steve Barger, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Texas-based investment firm Yacktman Asset Management is a leading shareholder in MSC Industrial Direct Co., Inc. (NYSE:MSM) with 1.2 million shares worth more than $112 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and Wells Fargo & Company (NYSE:WFC), MSC Industrial Direct Co., Inc. (NYSE:MSM) is one of the stocks feeling the heat of a market slowdown.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and MSC Industrial Direct Co., Inc. (NYSE:MSM) was one of them. Here is what the fund said:
“MSC Industrial Direct was another significant addition during the quarter. Management moves to improve margins and cash flow had the distributor of industrials parts and equipment poised for better performance leading into COVID, but the company was severely impacted by the closing of the economy. In a fragmented market, MSC has the ability to flex its supply chain to win market share as the business cycle picks up.”
14. Visteon Corporation (NASDAQ:VC)
Number of Hedge Fund Holders: 20
Visteon Corporation (NASDAQ:VC) is ranked fourteenth on our list of 15 stocks that analysts are cutting price targets of. The firm markets automotive electronics and connected cars solutions. It is headquartered in Michigan.
On September 27, investment advisory Goldman Sachs kept a Neutral rating on Visteon Corporation (NASDAQ:VC) stock but lowered the price target to $104 from $120, noting that the target reflected reduced production output for auto firms.
At the end of the second quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $175 million in Visteon Corporation (NASDAQ:VC), the same as in the preceding quarter worth $196 million.
13. Logitech International S.A. (NASDAQ:LOGI)
Number of Hedge Fund Holders: 20
Logitech International S.A. (NASDAQ:LOGI) is placed thirteenth on our list of 15 stocks that analysts are cutting price targets of. The firm makes and sells products that help connect people to digital and cloud technologies. It is headquartered in Switzerland.
On September 27, investment advisory Morgan Stanley downgraded Logitech International S.A. (NASDAQ:LOGI) stock to Underweight from Equal Weight and lowered the price target to $82 from $119, noting greater probability of negative estimate revisions and multiple compression.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Logitech International S.A. (NASDAQ:LOGI) with 1.6 million shares worth more than $196 million.
12. Bed Bath & Beyond Inc. (NASDAQ:BBBY)
Number of Hedge Fund Holders: 21
Bed Bath & Beyond Inc. (NASDAQ:BBBY) is a New Jersey-based firm that operates a chain of retail stores across North America. It is ranked twelfth on our list of 15 stocks that analysts are cutting price targets of.
On September 27, investment advisory Telsey Advisory Group maintained a Market Perform rating on Bed Bath & Beyond Inc. (NASDAQ:BBBY) stock but lowered the price target to $28 from $25. Cristina Fernandez, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Contrarius Investment Management is a leading shareholder in Bed Bath & Beyond Inc. (NASDAQ:BBBY) with 4.3 million shares worth more than $146 million.
In its Q2 2021 investor letter, Heartland Advisors, an asset management firm, highlighted a few stocks and Bed Bath & Beyond Inc. (NASDAQ:BBBY) was one of them. Here is what the fund said:
“The gyrations of story stocks touted on message boards have resulted in distortions in the market but on rare occasions have also swept up a few compelling opportunities. Bed Bath & Beyond (BBBY), a national retailer of home goods, babywear and health and beauty products, is one example.
Even before Bed Bath & Beyond made headlines earlier this year when day traders drove the price of shares up in an effort to squeeze short sellers, the company had caught our attention for the results its new management team was delivering since taking over in late 2019.
CEO Mark Tritton, who came to BBBY after a successful tenure at Target, quickly got to work installing new corporate leadership, closing underperforming stores, selling non-core businesses to firm up the balance sheet, and implementing retail best practices across the company. He also worked to improve store efficiency and revamped the company’s online presence.
The moves by Tritton made an impact. In its 2020 fiscal year, BBBY closed 144 under-performing stores, grew new digital customers by 95%, reduced debt by $1 billion, and returned $375 million of capital to shareholders. Despite the meaningful improvements, and the strong performance year-to-date, shares of the retailer are trading at just .35X sales and less than 5X estimated 2022 earnings before interest, taxes, depreciation, and amortization—roughly half of the multiple commanded by peer Williams- Sonoma Inc.
At current valuations, we view BBBY as offering attractive upside as recent improvements gain traction. It appears we’re not alone as executives have also been buying shares in recent months.”
11. Allegheny Technologies Incorporated (NYSE:ATI)
Number of Hedge Fund Holders: 28
Allegheny Technologies Incorporated (NYSE:ATI) is a Pennsylvania-based firm that makes and sells specialty materials and components. It is placed eleventh on our list of 15 stocks that analysts are cutting price targets of.
On September 28, investment advisory KeyBanc maintained an Overweight rating on Allegheny Technologies Incorporated (NYSE:ATI) stock but lowered the price target to $23 from $27. Philip Gibbs, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Allegheny Technologies Incorporated (NYSE:ATI) with 3.7 million shares worth more than $79 million.
10. Travel + Leisure Co. (NYSE:TNL)
Number of Hedge Fund Holders: 30
Travel + Leisure Co. (NYSE:TNL) is ranked tenth on our list of 15 stocks that analysts are cutting price targets of. The firm markets hospitality services and products. It is headquartered in Florida.
On September 28, investment advisory Jefferies downgraded Travel + Leisure Co. (NYSE:TNL) stock to Hold from Buy and reduced the price target to $61 from $74. David Katz, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $668 million in Travel + Leisure Co. (NYSE:TNL), the same as in the preceding quarter worth $745 million.
9. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 39
HP Inc. (NYSE:HPQ) is placed ninth on our list of 15 stocks that analysts are cutting price targets of. The company makes and sells personal computing devices and is headquartered in California.
On September 29, investment advisory JPMorgan downgraded HP Inc. (NYSE:HPQ) stock to Neutral from Overweight and reduced the price target to $30 from $35, noting that the upside for the shares was limited by concerns around the PC cycle.
At the end of the second quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in HP Inc. (NYSE:HPQ), down from 43 in the preceding quarter worth $1.5 billion.
8. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) is a Netherlands-based semiconductor manufacturer. It is ranked eighth on our list of 15 stocks that analysts are cutting price targets of.
On September 28, investment advisory Bernstein downgraded NXP Semiconductors N.V. (NASDAQ:NXPI) stock to Market Perform from Outperform and lowered the price target to $230 from $245, noting that the valuation of the firm was becoming “uncomfortable”.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in NXP Semiconductors N.V. (NASDAQ:NXPI) with 1 million shares worth more than $212 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NXP Semiconductors N.V. (NASDAQ:NXPI) was one of them. Here is what the fund said:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker (including) NXP Semiconductors, was among the portfolio’s leading contributors in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand.”
7. XPO Logistics, Inc. (NYSE:XPO)
Number of Hedge Fund Holders: 57
XPO Logistics, Inc. (NYSE:XPO) is a Connecticut-based company that provides supply chain solutions. It is placed seventh on our list of 15 stocks that analysts are cutting price targets of.
On September 29, investment advisory Raymond James kept an Outperform rating on XPO Logistics, Inc. (NYSE:XPO) stock but lowered the price target to $100 from $155. Patrick Tyler Brown, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Bermuda-based investment firm Orbis Investment Management is a leading shareholder in XPO Logistics, Inc. (NYSE:XPO) with 11 million shares worth more than $1.5 billion.
In its Q4 2020 investor letter, Adestella Investment Management, an asset management firm, highlighted a few stocks and XPO Logistics, Inc. (NYSE:XPO) was one of them. Here is what the fund said:
“XPO Logistics (XPO) – the XPO thesis was very simple, but it proved very successful. As the stock irrationally sold off in the spring and made only a tepid recovery in the following months, we were able to buy into a well-operated business with plenty of growth drivers at a compelling price. Sentiment surrounding the company improved thanks to a strong earnings, the resumption of asset sale plans that had been shelved in the spring, and the announcement of a spinoff to unlock the SOTP value. As the stock approached our estimate of a $115 fair value, we exited with more than a clean double from our cost basis.”
6. Lockheed Martin Corporation (NYSE:LMT)
Number of hedge fund holders: 58
Lockheed Martin Corporation (NYSE:LMT) is ranked sixth on our list of 15 stocks that analysts are cutting price targets of. The firm operates as a security and defense firm and is headquartered in Maryland.
On September 29, investment advisory Cowen downgraded Lockheed Martin Corporation (NYSE:LMT) stock to Market Perform from Outperform and lowered the price target to $375 from $400, noting that the relative upside of the firm was capped by overhangs.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Arrowstreet Capital is a leading shareholder in Lockheed Martin Corporation (NYSE:LMT) with 536,001 shares worth more than $202 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and Wells Fargo & Company (NYSE:WFC), Lockheed Martin Corporation (NYSE:LMT) is one of the stocks feeling the heat of a market slowdown.
In its Q4 2020 investor letter, RiverPark Advisors, LLC, an asset management firm, highlighted a few stocks and Lockheed Martin Corporation (NYSE:LMT) was one of them. Here is what the fund said:
“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”
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Disclosure. None. Analysts are Cutting Price Targets of These 15 Stocks is originally published on Insider Monkey.
