In this article, we will discuss the 10 stocks that recently received ratings cut from analysts. If you want to see some more stocks recently downgraded by analysts, you can directly visit Analysts Are Downgrading These 10 Stocks.
The key U.S. indices inched lower in pre-market trading Tuesday after a couple of Federal Reserve members pointed towards further hikes in interest rates. Atlanta Fed CEO Raphael Bostic said rates should increase over 5 percent. On the other hand, San Francisco Fed CEO Mary Daly stated that the central bank should keep raising the rates, though at a slower pace.
Meanwhile, notable stocks like PayPal Holdings, Inc. (NASDAQ:PYPL), Bank of America Corporation (NYSE:BAC) and Constellation Brands, Inc. (NYSE:STZ), were recently downgraded by analysts.
PayPal Holdings, Inc. (NASDAQ:PYPL) received a downgrade amid intensifying competition, while the stock rating for Bank of America Corporation (NYSE:BAC) was cut due to potential downside risk in case of a recession. On the other hand, Constellation Brands, Inc. (NYSE:STZ) received a downgrade amid a downtrading in its premium beer and wine category. Check out the complete article if you want to explore some other notable downgrades.
10. Heska Corporation (NASDAQ:HSKA)
Number of Hedge Fund Holders: 14
Morgan Stanley lowered its ratings for Heska Corporation (NASDAQ:HSKA) from “Equal-Weight” to “Underweight” on Friday, January 6. Analyst Erin Wright thinks the company’s underperformance in 2022 will pose a risk to the current year’s growth.
Wright previously used the word “ambitious” for the company’s medium to long-term outlook. Besides the rating cut, she decreased her price target for Heska Corporation (NASDAQ:HSKA) from $135 per share to $58 per share.
Meanwhile, some of the problems faced by Heska Corporation (NASDAQ:HSKA) were also discussed by investment management firm Alger Capital in its third-quarter 2022 investor letter. Here’s what the firm said:
“Shares of Heska underperformed this quarter largely due to an industry-wide slowdown in the animal health market. The company reported lower than expected earnings results due to the recent weakness in vet visitation trends. Consequently, management lowered forward guidance given the difficult macroeconomic outlook. While near-term weakness is expected at this time, we believe the company remains well positioned to benefit from new product launches going into next year.”
9. Doximity, Inc. (NYSE:DOCS)
Number of Hedge Fund Holders: 19
Doximity, Inc. (NYSE:DOCS), an online networking service for healthcare professionals, went public in June 2021. The stock initially skyrocketed to a high of around $107 but has been losing value since then. It has lost more than 30 percent of its value in the last year alone, while its current trading price stands around $31.
The San Francisco based-company recently received a downgrade from Morgan Stanley. The research firm cut its ratings for Doximity, Inc. (NYSE:DOCS) from “Equal-Weight” to “Underweight” on Friday, January 6.
Citing her latest industry checks, analyst Ricky Goldwasser pointed towards a further slowdown in the healthcare digital ad space growth in the coming quarters. She also slashed her price target for Doximity, Inc. (NYSE:DOCS) from $32 per share to $29 per share.
8. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 20
BofA lowered its ratings for XPeng Inc. (NYSE:XPEV) from “Buy” to “Neutral” on Friday, January 6. The downgrade came after rival Tesla, Inc. (NASDAQ:TSLA) decreased the prices of its electric vehicles (EVs) in China.
The research firm believes the latest move from Tesla, Inc. (NASDAQ:TSLA) could impact the sales and market share of Chinese rivals, including XPeng Inc. (NYSE:XPEV).
The decision from Tesla also indicates a potential demand problem, which is another reason behind the latest sell-off in Chinese EV stocks. XPeng Inc. (NYSE:XPEV) stock plummeted over 15 percent on Friday, January 6, following the development.
7. Duck Creek Technologies, Inc. (NASDAQ:DCT)
Number of Hedge Fund Holders: 21
Needham downgraded Duck Creek Technologies, Inc. (NASDAQ:DCT) after the insurance technology firm decided to be acquired by Vista Equity Partners. Needham cut its ratings for the Massachusetts-based company from “Buy” to “Hold” on January 9 following the news.
Vista plans to buy Duck Creek Technologies, Inc. (NASDAQ:DCT) in a cash transaction valued at $2.6 billion. The offer represented a hefty premium of 46 percent from the stock’s closing price on Friday, January 6.
Duck Creek Technologies, Inc. (NASDAQ:DCT) shares skyrocketed over 45 percent on Monday following the development. The deal, subject to shareholders’ consent, is expected to close in the second quarter.
Like Duck Creek Technologies, Inc. (NASDAQ:DCT), analysts also lowered their ratings for PayPal Holdings, Inc. (NASDAQ:PYPL), Bank of America Corporation (NYSE:BAC) and Constellation Brands, Inc. (NYSE:STZ).
6. Silvergate Capital Corporation (NYSE:SI)
Number of Hedge Fund Holders: 27
Silvergate Capital Corporation (NYSE:SI) shares have lost nearly 50 percent of their value over the last few days following a series of negative news and downgrades.
The crypto-focused bank recently announced disappointing preliminary results for the fourth quarter. Silvergate Capital Corporation (NYSE:SI) said the total deposits from digital asset clients stood at $3.8 billion at the end of Q4, a steep decline from $11.9 billion at the end of the prior quarter.
Meanwhile, Cathie Wood’s Ark Invest unloaded nearly all of its stakes in Silvergate Capital Corporation (NYSE:SI) following the latest sell off. The investment management firm sold about 0.43 million shares in the bank.
On top of that, Silvergate Capital Corporation (NYSE:SI) received a downgrade from a couple of research firms. Wedbush lowered its ratings for Silvergate from “Outperform” to “Neutral” on January 9, while Craig-Hallum cut its ratings from “Buy” to “Hold” on January 6.
Click to continue reading and see Analysts Are Downgrading These 5 Stocks.
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Disclosure: None. Analysts Are Downgrading These 10 Stocks is originally published on Insider Monkey.