In this article, we discuss the 5 stocks that were recently downgraded by analysts. If you want to see some other stocks on the list, go directly to Analysts are Downgrading These 10 Stocks.
5. Olaplex Holdings, Inc. (NASDAQ:OLPX)
Number of Hedge Fund Holders: 18
Shares of Olaplex Holdings, Inc. (NASDAQ:OLPX) turned red in pre-market trading Thursday, September 29, after Piper Sandler lowered its ratings for the beauty company from “Overweight” to “Neutral.”
Analyst Korinne Wolfmeyer thinks Olaplex Holdings, Inc. (NASDAQ:OLPX) could face a tough time due to intensifying competition from other hair brands such as K18. Wolfmeyer added the company needs to boost its marketing and educational efforts to overcome the hurdles. She cut her price target for Olaplex stock from $19 per share to $12 per share.
Earlier this year, Olaplex Holdings, Inc. (NASDAQ:OLPX) also appeared in ClearBridge Investments’ first-quarter 2022 investor letter, stating:
“During this sharp downward move for growth equities, the ClearBridge Mid Cap Growth Strategy trailed its Russell Midcap Growth benchmark. Strategy holdings were buffeted by a variety of macro and industry-specific factors. We exited hair care products maker Olaplex (NASDAQ:OLPX) in the consumer staples sector on concerns over what negative publicity for the company could mean for branding.”
4. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Number of Hedge Fund Holders: 29
Shares of Keurig Dr Pepper Inc. (NASDAQ:KDP) slipped over three percent on Tuesday, September 27, 2022, after Goldman Sachs downgraded the soft drink company from “Buy” to “Neutral.”
Analyst Bonnie Herzog believes the growth of Keurig Dr Pepper’s packaged beverage segment would start decelerating in the current environment. Herzog also referred to commodity inflation, which is expected to weigh on the company’s margins. She also cut her price target for Keurig Dr Pepper Inc. (NASDAQ:KDP) from $39 per share to $37 per share.
Keurig Dr Pepper Inc. (NASDAQ:KDP) shares haven’t gained any value so far in 2022. The stock is nearly flat on a year-to-date basis.
3. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 55
Wells Fargo decreased its ratings for Lockheed Martin Corporation (NYSE:LMT) from “Equal Weight” to “Underweight” on Wednesday, September 28. Analyst Matthew Akers thinks the company could face challenges in 2023 if geopolitical tensions eased.
Akers believes defense stocks, including Lockheed Martin Corporation (NYSE:LMT), are unlikely to gain significant value from the current levels unless there is a geopolitical escalation involving U.S. military. However, the prospects of any escalation are very low, the analyst added.
Separately, investment management firm Old West Investment Management also talked about Lockheed Martin Corporation (NYSE:LMT) in its second-quarter 2022 investor letter, stating:
“As I sat in the theater watching Top Gun: Maverick, it gave me tremendous pride knowing we are shareholders of Lockheed Martin (NYSE:LMT). When the Top Gun: Maverick team was looking to push the envelope and stand true to Maverick’s need for speed, LMT’s Skunk Works was their first call. With Skunk Works expertise in developing the fastest known aircraft along with a passion for defining the future of aerospace, LMT is at the epicenter of our nation’s defense.
Based in Bethesda, Maryland, LMT is an American aerospace arms, defense, information security and technology company. LMT employs 115,000 people worldwide, including 60,000 engineers and scientists. LMT is the world’s largest defense contractor. They manufacture the F-16, F-22 and F-35 fighter jets, Sikorsky Black Hawk helicopters, Skunk Works technology, Javelin, Himars, and Tomahawk missile systems and…” (Click here to see the full text)
2. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 63
Susquehanna analyst Bascome Majors slashed his ratings for CSX Corporation (NASDAQ:CSX) from “Positive” to “Neutral” on Wednesday, September 28, 2022, citing macro deterioration.
The analyst was moved by a number of factors, such as persistent pressure to improve rail service, a potential surge in labor costs and the looming risk of a strike. Majors also trimmed his price target for CSX Corporation (NASDAQ:CSX) from $35 per share to $29 per share.
Meanwhile, CSX Corporation (NASDAQ:CSX) recently announced that it would post financial results for the third quarter after the closing bell on October 20, 2022.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Shares of Apple Inc. (NASDAQ:AAPL) slipped over two percent in pre-market trading Thursday, September 29, after BofA downgraded the world’s most valuable company from “Buy” to “Neutral.
BofA thinks Apple Inc. (NASDAQ:AAPL) has been outperforming the broad market due to its resilience to weather tough macro environment. However, it may not be able to outperform over the next year due to slowing consumer demand, the research firm added. BofA also trimmed its price target for Apple Inc. (NASDAQ:AAPL) from $185 per share to $160 per share.
The downgrade came after several reports claimed that Apple Inc. (NASDAQ:AAPL) has scrapped its plans to boost the production of its newly launched iPhone 14 due to lower-than-expected demand.
You can also take a peek at 10 Long-Term Stocks To Buy During Recessions and 10 Best Cyclical Stocks for Inflation.
