Analysts Are Downgrading These 5 Stocks

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

5. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 57

Lululemon Athletica Inc. (NASDAQ:LULU) shares slipped nearly two percent on Tuesday, January 24, after Bernstein turned bearish on the Canadian athletic apparel retailer. Analyst Aneesha Sherman downgraded Lululemon from “Market Perform” to “Underperform.”

Sherman referred to a cautious consumer outlook, normalized demand trends and negative margin mix shifts. She believes these factors are going to impact the company’s probability. The analyst also cut her price target for Lululemon Athletica Inc. (NASDAQ:LULU) from $340 per share to $290 per share.

4. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 74

BofA slashed its ratings for Union Pacific Corporation (NYSE:UNP) from “Buy” to “Neutral” on Tuesday, January 24. Analyst Ken Hoexter pointed towards continued cost pressure and elevated inflation. Hoexter also cut his price target for the railroad holding company from $238 per share to $218 per share.

The downgrade follows the company’s disappointing financial results for Q4. On Tuesday, Union Pacific Corporation (NYSE:UNP) reported earnings of $2.67 per share, missing the consensus of $2.78 per share.

Revenue for the quarter rose 8 percent on a year-over-year basis to $6.18 billion, while analysts expected Union Pacific Corporation (NYSE:UNP) to generate revenue of $6.31 billion. The weakness was mainly attributed to shipment challenges amid labor shortages and disruptions in freight operations due to a winter storm.

3. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)

Number of Hedge Fund Holders: 85

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) recently came into the limelight after receiving a downgrade from Deutsche Bank. The research firm lowered its ratings for the cybersecurity company from “Buy” to “Hold” on Monday, January 23.

Analyst Brad Zelnick believes the cybersecurity sector is more vulnerable than many previously predicted. Zelnick expect software stocks to experience volatility this year. The analyst cut his price target for CrowdStrike Holdings, Inc. (NASDAQ:CRWD) from $150 per share to $115 per share.

Separately, investment management firm Carillon Tower Advisers also briefly discussed CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its fourth-quarter 2022 investor letter, stating:

“CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a provider of cyber security software solutions, delivered quarterly results that exceeded expectations, but provided guidance that disappointed, as the macro economy is causing longer sales cycles and some larger orders are being sold in smaller pieces. However, these deals are not being lost to competitors; they are just being delayed, and management expects enterprise security spending to remain relatively resilient in 2023.”

2. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 89

Bernstein slashed its ratings for Advanced Micro Devices, Inc. (NASDAQ:AMD) from “Outperform” to “Market Perform” on Tuesday, January 24. Analyst Stacy Rasgon was primarily moved by a deteriorating PC environment.

Rasgon thinks fading PC demand could hurt AMD’s profitability. The analyst also cut his price target for Advanced Micro Devices, Inc. (NASDAQ:AMD) from $95 per share to $80 per share. AMD stock slid over two percent on January 24 following the downgrade. However, the stock is still up about 15 percent on a year-to-date basis.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Microsoft Corporation (NASDAQ:MSFT) has been making headlines since releasing its fiscal second-quarter results on Tuesday. The software giant posted mixed results for the quarter along with a disappointing financial outlook for the current quarter.

Meanwhile, BMO Capital lowered its ratings for Microsoft Corporation (NASDAQ:MSFT) from “Outperform” to “Market Perform” following the latest results.

Microsoft Corporation (NASDAQ:MSFT) posted adjusted earnings of $2.32 per share for its fiscal Q2, above analysts’ average estimate of $2.29 per share. The quarterly revenue of $52.75 billion was marginally below the consensus of $52.94 billion.

For its fiscal third quarter, Microsoft Corporation (NASDAQ:MSFT) projected revenue in the range of $50.5 – $51.5 billion. The outlook missed analysts’ average estimate of $52.43 billion. Microsoft stock slid over four percent after the opening bell on Wednesday following its recent earnings.

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