In this article, we will discuss 10 stocks analysts are downgrading today. To take a look at some more stocks that are in the news, go to Analysts Are Downgrading These 5 Stocks on Friday.
US stocks are in the green on Friday and are trying to recover some of the losses incurred earlier in the week over concerns related to inflation and interest rate hike. The S&P 500 Index, the Dow 30 Index, and the NASDAQ Composite Index are all up 2.33%, 1.55%, and 3.50%, respectively, as of 11:54 AM ET. Some notable companies that were downgraded today include Atmos Energy Corporation (NYSE:ATO), PetIQ, Inc. (NASDAQ:PETQ), and Proterra Inc. (NASDAQ:PTRA).
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Let’s look at why these stocks were downgraded today and discuss how hedge funds are positioned in them.
10. United Parcel Service, Inc. (NYSE:UPS) was downgraded from an Overweight to a Neutral rating by Brian Ossenbeck at JPMorgan. The analyst thinks that although the Seattle, Washington-based shipping and logistics giant is executing its growth strategy well, United Parcel Service, Inc. (NYSE:UPS) does not have a near-term share price catalyst. The analyst does not see a significant upside to the company’s 2022 guidance, which was already brought forward by a year or the 2023 estimates. Ossenbeck also slashed the target price on United Parcel Service, Inc. (NYSE:UPS) to $202, which reflects a potential upside of 13.82% from the previous closing price.
Overall, United Parcel Service, Inc. (NYSE:UPS) was held by 55 hedge funds as of Q4 2021. Fisher Asset Management was long over 79,000 shares of United Parcel Service, Inc. (NYSE:UPS) during Q1 2022.
9. New Relic, Inc. (NYSE:NEWR) was downgraded from a Buy to a Hold rating by Mike Cikos at Needham following the cut in FY23 guidance. The San Francisco, California-based developer of cloud-based software reported that it anticipates the growth in revenue to stay at the current level and does not expect it to accelerate. The analyst sees this as “concerning” and thinks that the New Relic, Inc.’s (NYSE:NEWR) sales force should push to ensure sustained product use to avoid seasonal disruption. Furthermore, Cikos also noted that New Relic, Inc. (NYSE:NEWR) would not be able to issue long-term guidance following the retirement of CFO Mark Sachleben after 14 years.
According to Insider Monkey’s proprietary data, New Relic, Inc. (NYSE:NEWR) was held by 37 hedge funds as of Q4 2021.
8. ironSource Ltd. (NYSE:IS) was downgraded from a Buy to a Neutral rating by Clark Lampen at BTIG. The analyst highlighted that the guidance provided by the Israeli business platform for the app economy reflects a deceleration of growth in the second half of FY22 and FY23. The advertisement and gaming market is slowing down due to global economic concerns, and this could be a negative development for companies like ironSource Ltd. (NYSE:IS) and its competitors.
ironSource Ltd.’s (NYSE:IS) was held by 24 hedge funds at the end of Q4 2021. ExodusPoint Capital was the leading hedge fund investor in ironSource Ltd. (NYSE:IS) during Q1 2022.
7. Oshkosh Corporation (NYSE:OSK) was downgraded from a Neutral to an Underperform rating by Ross Gilardi at Bank of America. The analyst also revised the target price on Oshkosh Corporation (NYSE:OSK) from $103 to $92. The new target price sees a modest potential upside of 4.3% from the last closing price. The Wisconsin-based specialty truck and access equipment manufacturer has a high sales dependence on the public sector. This results in significant volatility in earnings, which makes it very challenging to forecast the company’s outlook. Oshkosh Corporation (NYSE:OSK) is also facing supply chain and cost-related concerns.
Of the 924 hedge funds in Insider Monkey’s database, Oshkosh Corporation (NYSE:OSK) was held by 26 hedge funds at the end of Q4 2021.
6. Avaya Holdings Corp. (NYSE:AVYA) was downgraded from an Outperform to a Market Perform rating by Lance Vitanza at Cowen. The analyst also reduced the target price on Avaya Holdings Corp. (NYSE:AVYA) from $26 to $6, which shows a slim upside of 3.27% from the last closing price. Vitanza highlighted the weak Q2 results and weaker-than-expected guidance as a concerning development for the Durham, North Carolina-based software company. There is uncertainty about the company’s ability to switch toward a recurring revenue model. The analyst also added that Avaya Holdings Corp. (NYSE:AVYA) has now become a “show me” story with “questionable liquidity” and looming near-term debt maturity.
Overall, Avaya Holdings Corp. (NYSE:AVYA) was held by 25 hedge funds as of Q4 2021.
Apart from Avaya Holdings Corp. (NYSE:AVYA), some other notable names that were downgraded today are Atmos Energy Corporation (NYSE:ATO), PetIQ, Inc. (NASDAQ:PETQ), and Proterra Inc. (NASDAQ:PTRA).
Click to continue reading and see Analysts Are Downgrading These 5 Stocks on Friday.
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Disclose. None. Analysts Are Downgrading These 10 Stocks on Friday is originally published on Insider Monkey.
