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 stocks on the list, go directly to Analysts Are Downgrading These 10 Stocks.

5. Mondelez International, Inc. (NASDAQ:MDLZ)

Number of Hedge Fund Holders: 52

UBS trimmed its ratings for Mondelez International, Inc. (NASDAQ:MDLZ) from “Buy” to “Neutral” on Thursday, December 8, citing limited upside for the stock.

Analyst Cody Ross thinks macro challenges would likely restrict the company’s profitability growth next year. Ross mentioned strong U.S. dollar, increasing interest rates and inflation that would likely cap the growth of Mondelez International, Inc. (NASDAQ:MDLZ) in the coming quarters.

Separately, investment management firm Coho Partners briefly discussed Mondelez International, Inc. (NASDAQ:MDLZ) in its third-quarter 2022 investor letter, stating:

“Analysts’ bottom-up estimates for both 2022 and 2023 for the S&P 500 Index are beginning to decline. Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Mondelez International (NASDAQ:MDLZ), which gets about 75% of its revenues outside the U.S.”

4. Airbnb, Inc. (NASDAQ:ABNB)

Number of Hedge Fund Holders: 58

Morgan Stanley downgraded Airbnb, Inc. (NASDAQ:ABNB) from “Equal-Weight” to “Underweight” on Tuesday, December 6. The research firm also cut its price target for the online lodging marketplace from $110 per share to $80 per share.

Analyst Brian Nowak thinks the company’s active listings are expected to grow at a CAGR of 7 percent between 2022 – 2025, down from a CAGR of 12 percent between 2018 – 2022. Nowak added that a drop in active listings would create an occupancy challenge for Airbnb, Inc. (NASDAQ:ABNB).

3. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 62

Shopify Inc. (NYSE:SHOP) received a downgrade from Wolfe Research on Wednesday, December 7. The research firm cut its ratings for the Canadian e-commerce giant from “Outperform” to “Peer Perform,” citing weakening growth due to macro hurdles.

Separately, UBS analyst Kunal Madhukar also issued a “Sell” rating for Shopify Inc. (NYSE:SHOP) on Thursday, December 8, mentioning competitive pressure from Amazon.

Meanwhile, investment management firm Artisan Partners also discussed Shopify Inc. (NYSE:SHOP) in its third-quarter 2022 investor letter, stating:

“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle… (Click here to read the full text)”

2. Expedia Group, Inc. (NASDAQ:EXPE)

Number of Hedge Fund Holders: 76

Wolfe Research turned bearish on Expedia Group, Inc. (NASDAQ:EXPE) on Wednesday, December 7. The research firm downgraded the online travel company from “Peer Perform” to “Underperform”.

The research firm pointed towards weakness in travel demand. Analyst Deepak Mathivanan believes travel demand would likely moderate amid the weakening macroeconomic environment in the coming quarters. Mathivanan added that the consensus expectations do not truly reflect the actual situation. He has a price target of $85 per share for Expedia Group, Inc. (NASDAQ:EXPE).

On the other hand, investment management firm Miller Value Partners expressed optimism about the growth prospects of Expedia Group, Inc. (NASDAQ:EXPE) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Expedia Group, Inc. (NASDAQ:EXPE) ($92.69) has a high teens free cash flow yield, trades at 14x 2022 and 10x 2023 earnings. We believe it can sustain earnings per share growth in the mid-teens. It massively improved its business and margins during the pandemic, has repaired its balance sheet and is chaired by an amazing capital allocator, Barry Diller. We think it’s worth more than double the current price.”

1. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 117

Baird cut its ratings for Salesforce, Inc. (NYSE:CRM) from “Outperform” to “Neutral” on Thursday, December 8. The research firm also reduced its price target for the cloud-based software company from $200 per share to $150 per share.

Analyst Rob Oliver expressed concerns over macro challenges and the recent departure of senior leadership. He added that macro hurdles could impact the growth of Salesforce, Inc. (NYSE:CRM) in the near term.

Separately,  investment advisor Aristotle Atlantic Partners, LLC also talked about Salesforce, Inc. (NYSE:CRM) in its third-quarter 2022 investor letter, stating:

“We sold Salesforce, Inc. (NYSE:CRM) to reduce our weighting in the Information Technology sector. Salesforce held their investor day, and the company reiterated their organic Fiscal Year 2026 revenue target of $50 billion. This target remains more back-end loaded based on current slowing macroeconomic conditions and requires new annual contract growth well ahead of what the company has been averaging for the past few years. We are skeptical that the company will be able to achieve this revenue target organically and see Merger & Acquisitions (M&A) being key to achieving the growth. While we believe Salesforce has shown good success in growing its non-CRM clouds, we do see more competitive pressures emerging for the Marketing and Customer Service Clouds, specifically on the pricing side during a global economic slowdown.”

You can also take a peek at 14 Safe Stocks To Buy for Beginners and 12 Best Consumer Staple Stocks.