In this article, we will discuss some of the notable stocks analysts are downgrading today. To take a look at some more stocks that are being downgraded, go to Analysts are Downgrading These 5 Stocks Today.
US stocks are trying to overturn the 7-week losing streak today as the S&P 500 Index, the Dow 30 Index, and the NASDAQ Composite Index are all up by 1.80%, 1.58%, and 2.25%, respectively, as of 11:25 AM ET. A rebound from retail firms is leading the stock market with companies outperforming consensus estimates and raising their earnings forecasts despite the challenging macroeconomic environment. However, multiple companies such as Dow Inc. (NYSE:DOW), Nutanix, Inc. (NASDAQ:NTNX) and Molina Healthcare, Inc. (NYSE:MOH) were downgraded by analysts today.
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Let’s look at why analysts are downgrading these stocks today and discuss how hedge funds are positioned in them.
10. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 89
Union Pacific Corporation (NYSE:UNP) received a downgrade in rating from an Outperform to In-Line by Jonathan Chappell at Evercore ISI. The analyst gave Union Pacific Corporation (NYSE:UNP) stock a price target of $245, which reflects a potential upside of 12.6% from the last closing price. Chappell downgraded the second-largest railroad company in the US because of the depressed volumes in Q2 2022. However, he highlighted that rail stocks such as Union Pacific Corporation (NYSE:UNP) still offer “relative safe-haven status” because of their strong pricing power and exposure to commodities. He stated that the sector is immune to the downturn in the economic cycle.
ClearBridge Investments shared its stance on Union Pacific Corporation (NYSE:UNP) in its Q4 2021 investor letter. Here’s what the firm said:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which U.S. rail operator Union Pacific was among the lead performers. Union Pacific is the largest listed railroad company in North America. With a rail network of over 32,000 route miles connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern U.S. gateways, its freight transportation services are crucial to the functioning of the U.S. economy.”
Union Pacific Corporation (NYSE:UNP) was held by 89 hedge funds at the end of Q1 2022.
9. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 35
The Kraft Heinz Company (NASDAQ:KHC) has crashed 6.74% as of 11:20 AM ET following a downgrade from Cody Ross at UBS. The analyst downgraded The Kraft Heinz Company (NASDAQ:KHC) stock from a Neutral to a Sell rating and lowered the target price from $40 to $34. The revised target price reflects a potential downside of 1.3% from the previous closing price. The analyst anticipates The Kraft Heinz Company (NASDAQ:KHC) to combat one of the highest inflationary periods in the next year by opting for a price increase in its products. The fifth-largest food and beverage company in the world has significantly reduced its promotions and faces the risk of customers converting to private label products.
Berkshire Hathaway was the leading investor in The Kraft Heinz Company (NASDAQ:KHC) at the end of Q1 2022. Overall, 35 hedge funds were long on the stock during the first quarter of 2022.
8. Cardinal Health, Inc. (NYSE:CAH)
Number of Hedge Fund Holders: 38
Cardinal Health, Inc. (NYSE:CAH) was downgraded from an Overweight to an Equal Weight rating by Steve Valiquette at Barclays. The analyst also slashed the target price on Cardinal Health, Inc. (NYSE:CAH) from $70 to $64. The analyst sees Cardinal Health, Inc. (NYSE:CAH) benefitting from “outsized traditional generic pipeline tailwinds.” However, he stated that Cardinal Health, Inc. (NYSE:CAH) is not in a position to leverage faster-growth specialty drug distribution compared to its competitors, and the company’s medical segment is characterized by an “inferior asset mix.”
Of the 912 hedge funds tracked by Insider Monkey at the end of Q1 2022, 38 funds reported owning a stake in Cardinal Health, Inc. (NYSE:CAH).
7. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 60
Centene Corporation (NYSE:CNC) has crashed 3.73% as of 11:21 AM ET after the Missouri-based intermediary for public and private healthcare insurance programs received a downgrade in rating from Kevin Fischbeck at Bank of America. The analyst downgraded Centene Corporation (NYSE:CNC) from a Buy to a Neutral rating and also lowered the target price on the stock from $95 to $90. Fischbeck anticipates a higher level of certainty in the medical loss ratio next year. The revised target price provides a potential upside of 5.49% from yesterday’s closing price.
At the end of Q1 2022, 60 hedge funds reported owning a stake in Centene Corporation (NYSE:CNC). Viking Global was long over 7.8 million shares of Centene Corporation (NYSE:CNC) as of Q1 2022.
6. Oscar Health, Inc. (NYSE:OSCR)
Number of Hedge Fund Holders: 29
Oscar Health, Inc. (NYSE:OSCR) has fallen 1.78% as of 11:40 AM ET after the New York-based health insurance company was downgraded from a Buy to a Neutral rating by Kevin Fischbeck at Bank of America. The analyst slashed the price target on Oscar Health, Inc. (NYSE:OSCR) in half from $12 to $6. Fischbeck highlighted that the health insurance industry would have to work through the expiration of the subsidies provided by the Affordable Care Act. In an investor note, the analyst also shared that the Medicaid redeterminations and the resulting shift within the risk pool are making it more challenging to value Oscar Health, Inc. (NYSE:OSCR).
Along with Oscar Health, Inc. (NYSE:OSCR), some other notable stocks that have been downgraded by analysts today are Dow Inc. (NYSE:DOW), Nutanix, Inc. (NASDAQ:NTNX), and Molina Healthcare, Inc. (NYSE:MOH).
Click to continue reading and see Analysts are Downgrading These 5 Stocks Today.
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Disclose. None. Analysts are Downgrading These 10 Stocks Today is originally published on Insider Monkey.
