In this article, we discuss the 5 tech socks that received price-target cuts from analysts after their recent earnings. If you want to read our detailed analysis of these companies, go directly to Analysts are Cutting Price Targets of These 10 Tech Stocks After Earnings.
5. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 43
Credit Suisse recently slashed its price target for International Business Machines Corporation (NYSE:IBM) from $166 per share to $156 per share. The revised price target follows the company’s second-quarter results.
International Business Machines Corporation (NYSE:IBM) reported adjusted earnings of $2.31 per share on revenue of $15.54 billion. This compares to analysts’ average estimates of $2.27 per share for earnings and $15.18 billion for revenue.
On the downside, International Business Machines Corporation (NYSE:IBM) lowered its free cash flow outlook for the full year amid a strong dollar and discontinuation of business in Russia. The company now expects a free cash flow of $10 billion for 2022, below its previous outlook in the range of $10 – $10.5 billion.
4. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 46
Texas Instruments Incorporated (NASDAQ:TXN) released its second-quarter results earlier this week, easily beating the consensus for both profit and sales. Yet, Mizuho trimmed its price target for the semiconductor giant from $175 per share to $168 per share on Wednesday, July 27. Mizuho analyst Vijay Rakesh thinks that Texas Instruments Incorporated (NASDAQ:TXN) could face pricing pressure amid an improving industry supply.
Looking at the latest performance, Texas Instruments Incorporated (NASDAQ:TXN) reported earnings of $2.45 per share for the second quarter, well above $2.13 per share estimated by analysts. The quarterly revenue of $5.21 billion also smashed the consensus of $4.65 billion.
For the current quarter, Texas Instruments Incorporated (NASDAQ:TXN) expects revenue in the range of $4.9 – $5.3 billion. The midpoint of the guidance is slightly above the expectations of $4.98 billion.
3. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 46
JPMorgan recently cut its price target for ASML Holding N.V. (NASDAQ:ASML) from $925 per share to $794 per share following its second-quarter results. While the semiconductor company surpassed financial expectations for the quarter, its results were overshadowed by the revised sales outlook for the full year.
ASML Holding N.V. (NASDAQ:ASML) reported earnings of 3.54 euros per share on revenue of 5.4 billion euros, while analysts were looking for earnings of 3.48 euros per share on sales of 5.3 billion euros.
On the downside, ASML Holding N.V. (NASDAQ:ASML) lowered its full-year sales growth outlook to 10 percent, from its previous projection of 20 percent growth.
2. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 72
Deutsche Bank decreased its price target for Shopify Inc. (NYSE:SHOP) from $50 per share to $40 per share on Thursday, July 28, 2022. According to Deutsche Bank analyst Bhavin Shah, the company’s Q2 performance and a decision to cut 10 percent of its global workforce indicate that e-commerce trends are normalizing.
Shah added that Shopify’s sales growth would likely be weighed down by inflationary pressure and normalizing e-commerce trends in the coming quarters.
Meanwhile, Shopify Inc. (NYSE:SHOP) missed profit and sales expectations for the second earlier this week. The Ontario-based company reported an adjusted loss of 3 cents per share, contrary to analysts’ average estimate for a profit of 2 cents per share. In addition, Shopify Inc. (NYSE:SHOP) posted revenue of $1.3 billion, below the consensus of $1.33 billion.
Separately, Shopify Inc. (NYSE:SHOP) appeared in the second-quarter 2022 investor letter of investment management firm Rowan Street Capital LLC. Here’s what the firm said:
“Tobias Lutke, Shopify (NYSE:SHOP) Founder and CEO
When Tobias Lütke opened an online snowboarding store in 2004, he realized how painfully cumbersome e-commerce software was. So he decided to create Shopify – a platform that made it easy for anyone to open up an online store.
Tobi has built Shopify into one of the most popular e-commerce platforms in the world, with $175 billion in GMV (Gross Merchandise Value) and $4.6 billion in revenues in 2021. SHOP went public in 2015, when revenues were just lightly above $200 million, and the stock is up 1,233% since its IPO. Shopify stock peaked in November 2021 (traded at astronomical 47x sales), which coincided with peak enthusiasm for the tech-driven, “stay-home” stocks. Since then, the stock is down almost 80% and is currently trading at just 6x 2023E sales. We believe that Mr. Market is offering us an exceptional value, at current price levels, for an exceptional company led by a very talented, visionary founder/CEO.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Cowen lowered its price target for Microsoft Corporation (NASDAQ:MSFT) from $330 per share to $320 per share, citing the software giant’s mixed financial performance for its fiscal fourth quarter.
Microsoft Corporation (NASDAQ:MSFT) released its fiscal Q4 results on Tuesday, July 26, 2022. The company earned $2.23 per share on an adjusted basis, missing the expectations of $2.29 per share. Revenue for the quarter rose 12 percent versus last year to $51.87 billion, but analysts were looking for $52.44 billion.
The latest results were hurt by multiple macroeconomic factors. Microsoft Corporation (NASDAQ:MSFT) blamed unfavorable foreign exchange rate, production delays in China and scaled-down presence in Russia for the weak performance.
For its fiscal first quarter, Microsoft Corporation (NASDAQ:MSFT) expects to generate revenue in the range of $49.25 – $50.25 billion, below analysts’ average estimate of $51.49 billion.
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