Analysts are Downgrading These 5 Stocks

In this article, we discuss the 5 stocks recently downgraded by analysts. If you want to see more such companies on the list, go directly to Analysts are Downgrading These 10 Stocks.

5. Aptiv PLC (NYSE:APTV)

Number of Hedge Fund Holders: 39

Shares of Aptiv PLC (NYSE:APTV) slipped over three percent yesterday morning after receiving a downgrade from Morgan Stanley. The research firm slashed its ratings for the automotive technology supplier from “Overweight” to “Equal Weight.”

Morgan Stanley analyst Adam Jonas was primarily moved by a slower-than-expected pace of EV adoption. Jonas also reduced his sales and margin outlook for Aptiv PLC (NYSE:APTV). Nevertheless, he expressed optimism about the company’s growth prospects in the long term.

4. Williams-Sonoma, Inc. (NYSE:WSM)

Number of Hedge Fund Holders: 40

Shares of Williams-Sonoma, Inc. (NYSE:WSM) slid nearly five percent in mid-day trading Monday after Morgan Stanley turned bearish on the consumer retail company, citing an expected pressure on profitability.

The research firm downgraded Williams-Sonoma, Inc. (NYSE:WSM) from “Equal-Weight” to “Underweight.” Analyst Simeon Gutman pointed towards normalizing sales volumes and dropping discretionary spending. He reduced his price target for WSM stock from $150 per share to $100 per share.

The downgrade came a couple of weeks after Williams-Sonoma, Inc. (NYSE:WSM) posted mixed results for its fiscal third quarter. Back then, the company said it would not reaffirm or update its financial outlook through 2024 due to macro uncertainty.

3. First Solar, Inc. (NASDAQ:FSLR)

Number of Hedge Fund Holders: 45

Shares of First Solar, Inc. (NASDAQ:FSLR) slightly moved down after the opening bell yesterday. The drop followed a downgrade from JPMorgan analyst Mark Strouse, who decreased his ratings for the solar technology company from “Overweight” to “Neutral.”

Strouse referred to the significant gains made by FSLR stock since the approval of the Inflation Reduction Act (IRA) in August. However, he believes there isn’t much room for more gains. The analyst also pointed towards increasing competition that could affect the growth of First Solar, Inc. (NASDAQ:FSLR).

FSLR stock has climbed nearly 90 percent so far in 2022. Much of that gain has been attributed to IRA, which offers tax credits to solar-energy equipment buyers. Many believe First Solar, Inc. (NASDAQ:FSLR) is a key beneficiary of IRA.

2. Twilio Inc. (NYSE:TWLO)

Number of Hedge Fund Holders: 58

Shares of Twilio Inc. (NYSE:TWLO) slipped over two percent in mid-day trading Monday after Jefferies lowered its ratings for the digital communications platform from “Buy” to “Hold,” citing persistent near-term growth challenges. The research firm also cut its price target for Twilio stock from $110 per share to $50 per share.

Twilio Inc. (NYSE:TWLO) reported better-than-expected results for Q3 earlier this month. However, investors seemed disappointed with its soft sales outlook for the current quarter. The company projected revenue of $995 – $1.005 billion for Q4, below analysts’ average estimate of $1.07 billion.

Separately, investment management firm RiverPark Funds discussed Twilio Inc. (NYSE:TWLO) in its second-quarter 2022 investor letter, stating:

“Twilio Inc. (NYSE:TWLO) offers a full suite of cloud-based communications software, services and tools that allows companies in a wide range of businesses to build omni-channel communications capabilities (video, chat, voice, SMS, fax and email) directly into their customer facing applications without needing to build back-end infrastructure and interfaces. The company also …” (Click Here to read the full text)

1. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Fund Holders: 63

Shares of TransDigm Group Incorporated (NYSE:TDG) declined more than four percent yesterday after Wells Fargo dropped its ratings for the aerospace manufacturing company from “Overweight” to “Equal Weight.”

Analyst Matthew Akers cited weakening demand and elevated costs that could slow down the company’s growth. Akers reduced his price target for TransDigm Group Incorporated (NYSE:TDG) from $735 per share to $660 per share.

Earlier this year, investment management firm Vulcan Value Partners briefly discussed TransDigm Group Incorporated (NYSE:TDG) in its second-quarter 2022 investor letter. Here’s what the firm said:

“TransDigm Group Inc. is an aerospace manufacturing firm that provides highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales of sole-sourced products. The company produces high levels of free cash flow and has an effective, shareholder-oriented management team who are good capital allocators. Despite the company’s strong results during the quarter and solid outlook, its stock price declined.”

You can also take a peek at 10 Reddit Stocks That Are Too Cheap To Ignore and 12 Best Consumer Staple Stocks.