In this article, we will discuss the 10 stocks recently downgraded by analysts. If you want to see more such stocks on the list, you can directly visit Analysts Are Downgrading These 5 Stocks.
Microsoft Corporation (NASDAQ:MSFT) is in the news after the company posted fiscal Q2 results. The company’s revenue outlook for the March quarter was below the consensus. Subsequently, BMO Capital cut its ratings for Microsoft from “Outperform” to “Market Perform” following its latest earnings.
Besides Microsoft Corporation (NASDAQ:MSFT), analysts also recently lowered their ratings for CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and Advanced Micro Devices, Inc. (NASDAQ:AMD). Check out the complete article to find the details of these downgrades.
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10. The Cheesecake Factory Incorporated (NASDAQ:CAKE)
Number of Hedge Fund Holders: 14
Shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) fell over eight percent on Tuesday, January 24, after Raymond James downgraded the restaurant company from “Outperform” to “Market Perform.”
Analyst Brian Vaccaro believes the stock is now fairly valued, considering its year-to-date surge. Vaccaro also expressed concerns over the company’s near-term profitability. He added that The Cheesecake Factory Incorporated (NASDAQ:CAKE) is still experiencing lower margin visibility.
9. Apollo Endosurgery, Inc. (NASDAQ:APEN)
Number of Hedge Fund Holders: 14
Cowen lowered its ratings for Apollo Endosurgery, Inc. (NASDAQ:APEN) from “Outperform” to “Market Perform” on Monday, January 23.
Analyst Joshua Jennings was primarily moved by the medical technology company’s decision to be acquired by Boston Scientific Corporation (NYSE:BSX) last year. Jennings trimmed his price target for Apollo Endosurgery, Inc. (NASDAQ:APEN) from $13 per share to $10 per share.
Boston Scientific Corporation (NYSE:BSX) decided to buy Apollo Endosurgery, Inc. (NASDAQ:APEN) in a cash deal valued at $10 per share in November 2022. The acquisition will help the company expand its foothold in the endoluminal surgery (ELS) space using Apollo’s products for ELS procedures and gastrointestinal management.
8. Levi Strauss & Co. (NYSE:LEVI)
Number of Hedge Fund Holders: 20
JPMorgan downgraded Levi Strauss & Co. (NYSE:LEVI) from “Overweight” to “Neutral” on Monday, January 23. Analyst Matthew Boss cited mixed denim trends and a more balanced risk/reward at the current stock price.
Boss cut his price target for Levi Strauss & Co. (NYSE:LEVI) from $19 per share to $17 per share. Earlier this month, Citigroup also predicted weaker denim demand in the coming quarters. The research firm said consumers are shifting away from costly jeans to opt for formal clothing.
Levi Strauss & Co. (NYSE:LEVI) plans to release its fourth-quarter results after the closing bell on Wednesday, January 25. Analysts expect the company to earn 29 cents per share on revenue of $1.57 billion.
7. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 37
Shares of Dollar Tree, Inc. (NASDAQ:DLTR) slid nearly three percent on Tuesday, January 24, after receiving a downgrade from Gordon Haskett. The research firm lowered its ratings for the discount variety stores operator from “Buy” to “Accumulate.”
The downgrade came a day after Dollar Tree, Inc. (NASDAQ:DLTR) announced the departure of its CEO. Gordon Haskett analyst Chuck Grom believes the leadership transition could make things a bit choppy for the company in the near term.
Dollar Tree, Inc. (NASDAQ:DLTR) recently announced that chief executive officer Mike Witynski is leaving the company. Subsequently, executive chairman Richard Dreiling will become the new CEO, effective January 29.
Like Dollar Tree, Inc. (NASDAQ:DLTR), analysts also cut their ratings for Microsoft Corporation (NASDAQ:MSFT), CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and Advanced Micro Devices, Inc. (NASDAQ:AMD).
6. Peloton Interactive, Inc. (NASDAQ:PTON)
Number of Hedge Fund Holders: 45
Shares of Peloton Interactive, Inc. (NASDAQ:PTON) fell more than five percent on Tuesday, January 24, after Baird downgraded the exercise equipment company, citing signs of more people returning to gyms. The research firm lowered its ratings for Peloton stock from “Outperform” to “Neutral.”
Peloton Interactive, Inc. (NASDAQ:PTON) enjoyed massive growth after a large number of people started working at home following Covid-19 outbreak in 2020. However, the demand for its equipment has dropped sharply over the last year with the reopening of gyms. PTON stock has lost about 60 percent of its value during the past 12 months amid fading demand.
Separately, investment advisor Merion Road Capital also discussed the demand issued in its third-quarter 2022 investor letter. Here’s what the firm said:
“Peloton Interactive, Inc. (NASDAQ:PTON) is quite a different story. You may recall from my Q1 letter that I initiated a position in the stock given the potential for a new CEO to leverage the company’s passionate and engaged userbase. The investment had meaningful upside potential (multiples of the then trading price), but also presented real downside risk; as such, I kept our exposure to just a few percentage points of the portfolio. Fast forward six months and underlying trends like churn, engagement, and new users weakened dramatically. I sold our shares as the likelihood for the company to achieve financial success has become increasingly remote.”
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Disclosure: None. Analysts Are Downgrading These 10 Stocks is originally published on Insider Monkey.
