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. Fate Therapeutics, Inc. (NASDAQ:FATE)

Number of Hedge Fund Holders: 27

Truist analyst Robyn Karnauskas lowered her ratings for Fate Therapeutics, Inc. (NASDAQ:FATE) from “Buy” to “Hold” on Friday, January 6. Karnauskas was primarily moved by the company’s decision to end collaboration with Janssen. She reduced her price target for the biopharmaceutical company from $46 per share to $7 per share.

Meanwhile, Fate Therapeutics, Inc. (NASDAQ:FATE) also announced job cuts as a part of its efforts to limit operating costs. Moving forward, the company plans to prioritize its clinical programs besides discontinuing some of them.

4. Baxter International Inc. (NYSE:BAX)

Number of Hedge Fund Holders: 42

Morgan Stanley downgraded Baxter International Inc. (NYSE:BAX) from “Overweight” to “Equal-Weight” on Friday, January 6. Analyst Drew Ranieri expects the healthcare company to benefit from the Hillrom deal in the longer run. However, he acknowledged that he failed to estimate the impact that macroeconomic factors would have on Baxter’s legacy business.

Ranieri also expressed concerns over little clarity around the company’s business while going forward. In addition, he cut his price target for Baxter International Inc. (NYSE:BAX) from $70 per share to $55 per share.

Meanwhile, Baxter International Inc. (NYSE:BAX) recently disclosed plans to spin off its renal care segment into a separately listed company. It is also exploring strategic alternatives for its biopharma solutions unit.

3. Constellation Brands, Inc. (NYSE:STZ)

Number of Hedge Fund Holders: 43

Cowen analyst Vivien Azer lowered her ratings for Constellation Brands, Inc. (NYSE:STZ) from “Outperform” to “Market Perform” on Friday, January 6. The analyst expressed concerns over the downtrading in the company’s premium beer and wine category.

Azer also thinks the company’s beer margins will stay under pressure. She cut her price target for Constellation Brands, Inc. (NYSE:STZ) from $275 per share to $200 per share.

The downgrade came a day after Constellation Brands, Inc. (NYSE:STZ) revised its profit outlook for the full year. The beer and wine producer now expects earnings in the range of $11 – $11.20 per share for fiscal 2023, down from its previous forecast between $11.20 to $11.60 per share.

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 97

Bank of America Corporation (NYSE:BAC) received a downgrade just ahead of its fourth-quarter earnings. Deutsche Bank slashed its ratings for the Charlotte-based banking giant from “Buy” to “Hold” on Friday, January 6.

The research firm predicted new lows for U.S. bank stocks. Deutsche Bank analyst Matt O’Connor expects downside risk in case of a recession. O’Connor lowered his price target for Bank of America Corporation (NYSE:BAC) from $45 per share to $36 per share.

Major U.S. banks, including Bank of America Corporation (NYSE:BAC), are set to report their earnings this week. Analysts expect lower fourth-quarter profit primarily amid an economic downturn.

1. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 126

PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the best stocks in the digital payments space due to its solid business fundamentals and strong balance sheet. However, KeyBanc analyst Josh Beck believes the company is facing intense competition from rivals, like Apple Pay and Shop Pay, which could hamper its growth.

Beck downgraded PayPal Holdings, Inc. (NASDAQ:PYPL) from “Overweight” to “Sector Weight” and reduced his price target from $100 per share to $80 per share on Monday, January 9. The analyst was primarily moved by intensifying competition and changing industry dynamics.

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