In this article, we discuss the 5 stocks that analysts are cutting price targets of. If you want to read our detailed analysis of these stocks, go directly to Analysts are Cutting Price Targets of These 10 Stocks.
5. Agilent Technologies, Inc. (NYSE:A)
Number of Hedge Fund Holders: 39
Agilent Technologies, Inc. (NYSE:A) operates in the life sciences tools and services business. It is ranked fifth on our list of 10 stocks that analysts are cutting price targets of. Although the firm delivered solid earnings in the second quarter and raised guidance numbers, it has since fallen prey to inflation fears that are hammering biotech stocks.
Cowen analyst Dan Brennan reiterated an Outperform rating on Agilent Technologies, Inc. (NYSE:A) stock but lowered the price target to $180 from $200 on October 14. Cowen had previously raised the target on the stock in the preceding two months.
At the end of the second quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $3.8 billion in Agilent Technologies, Inc. (NYSE:A), down from 42 the preceding quarter worth $3.4 billion.
In its Q2 2021 investor letter, Pershing Square Holdings, Ltd, an asset management firm, highlighted a few stocks and Agilent Technologies, Inc. (NYSE:A) was one of them. Here is what the fund said:
“Our large commitment to UMG required that we raise cash from the sale of one of our other investments. In light of the high quality of companies in our portfolio, this was a difficult decision to make. Ultimately, we chose to sell Agilent, as its current share price approached our conservative estimate of intrinsic value. If we did not need the capital, we would not have sold the stock.
Agilent has been a highly successful investment since our original purchase nearly two years ago, compounded by our additional investment in the company in the Covid market decline last year. Agilent’s stock price has increased 2.2 times since our initial purchase as a result of the company’s acceleration in revenue growth and profi tability.10 Agilent has been a critical supplier of technology and services to labs around the world fighting the Covid pandemic. The company’s management team led by Mike McMullen deserves enormous credit for the company’s success and for its important contribution to science and the fight against Covid for which we all should be extremely grateful.”
4. Avantor, Inc. (NYSE:AVTR)
Number of Hedge Fund Holders: 44
Avantor, Inc. (NYSE:AVTR) had announced in September that it would be acquiring the Masterflex bioprocessing business of Antylia Scientific in a deal worth $2.9 billion. The firm afterwards announced a $750 million equity offering to fund the purchase. It is placed fourth on our list of 10 stocks that analysts are cutting price targets of. Preliminary earnings for the third quarter indicate the revenue over the period will be in line with consensus estimates.
Investment bank Cowen kept an Outperform rating on Avantor, Inc. (NYSE:AVTR) stock on October 14 but lowered the price target to $47 from $62. The coverage was transferred to analyst Dan Brennan at the advisory.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in Avantor, Inc. (NYSE:AVTR) with 11.7 million shares worth more than $416 million.
3. Ball Corporation (NYSE:BLL)
Number of Hedge Fund Holders: 44
Ball Corporation (NYSE:BLL) is another packaging stock that is planning to expand operations. In late September, the firm announced that it would build a $290 million beverage can plant in Nevada. Earlier that month, the company had priced a $850 million senior notes offering. It is ranked third on our list of 10 stocks that analysts are cutting price targets of.
Ball Corporation (NYSE:BLL) stock was downgraded by Bank of America to Neutral from Buy and the price target was also lowered by the bank to $95 from $101. Analyst George Staphos noted that the firm was still viewed as a high quality holding but seemed fairly valued.
At the end of the second quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Ball Corporation (NYSE:BLL), up from 38 in the preceding quarter worth $1.4 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Ball Corporation (NYSE:BLL) was one of them. Here is what the fund said:
“Aluminum beverage and food container manufacturer Ball Corp, meanwhile, delivered fourth-quarter operating income slightly lower than consensus, though this was mainly attributable to higher startup costs for large new facilities coming online in North America. These investments and additional capacity projects will contribute to strong volume growth globally, however. Aluminum cans are infinitely recyclable and offer the best replacement product for single-use plastic beverage containers, in our view. They are more likely to be recycled than single-use plastic and are more energy efficient in production as well.”
2. BlackRock, Inc. (NYSE:BLK)
Number of Hedge Fund Holders: 47
BlackRock, Inc. (NYSE:BLK) is placed second on our list of 10 stocks that analysts are cutting price targets of. The company has strong fundamentals and is slated for growth across a wide range of market segments in the coming months. However, BMO Capital has forecast that despite the rosy outlook, the multiple on the firm has “limited upside”.
On October 14, investment advisory Deutsche Bank maintained a Buy rating on BlackRock, Inc. (NYSE:BLK) stock but reduced the price target to $1,008 from $1,039. Brian Bedell, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in BlackRock, Inc. (NYSE:BLK), up from 42 the preceding quarter worth $1.5 billion.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and BlackRock, Inc. (NYSE:BLK) was one of them. Here is what the fund said:
“During the quarter, we initiated a position in BlackRock Inc., the world’s largest investment manager with $9 trillion in assets under management. BlackRock offers an array of products across equities, fixed income, alternatives, and cash management to institutional and retail investors worldwide. About one-quarter of BlackRock’s assets under management is actively managed, and the rest is in passive index funds and iShares-branded ETFs. The company offers technology services including the investment and risk management platform, Aladdin, as well as other advisory services and solutions. Over the five years ending December 31, 2020, assets under management and earnings per share grew at compound annual growth rates of 13% and 12%, respectively.
We believe BlackRock is well positioned for continued growth given its diverse product offering, global distribution, brand recognition, and capable management team. With most of its assets in index funds and ETFs, BlackRock is a prime beneficiary of the ongoing shift to passive investing. The company also benefits from increasing demand for sustainable investment strategies and “barbell” strategies that use a combination of low-cost index funds, active and illiquid alternatives products. BlackRock fits squarely within our Tech-Enabled Financials theme given its longstanding commitment to innovation and proprietary technology platform, Aladdin, which serves as the investment and risk management system for both BlackRock and a growing number of institutional investors around the world. We expect BlackRock’s earnings per share will continue to grow at a doubledigit annual rate over a market cycle through a combination of mid-single-digit growth in assets under management from net inflows, market appreciation, low to mid-teens revenue growth in technology services, modest margin expansion, and share repurchases.”
1. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 62
It is somewhat surprising that Caterpillar Inc. (NYSE:CAT), an industrial manufacturing stock, has slumped recently in light of the successful regulatory passage of a $2 trillion plan by the US President to jumpstart American manufacturing. The firm is ranked first on our list of 10 stocks that analysts are cutting price targets of. Perhaps one reason the stock has pulled back in recent weeks is the increase in prices of iron ore and other metals as China cracks down on the mining industry in the country.
Evercore ISI analyst David Raso kept an Outperform rating on Caterpillar Inc. (NYSE:CAT) stock on October 14 but lowered the price target to $257 from $291, highlighting the supply chain problems that were affecting the business of the company.
Out of the hedge funds being tracked by Insider Monkey, Washington-based firm Bill & Melinda Gates Foundation Trust is a leading shareholder in Caterpillar Inc. (NYSE:CAT) with 10 million shares worth more than $2.2 billion.
In its Q2 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Caterpillar Inc. (NYSE:CAT) was one of them. Here is what the fund said:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
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