In this article, we discuss the 5 stocks receiving price-target cut from analysts. If you want to see more such stocks on the list, go directly to Analysts Just Trimmed Price Targets for These 10 Stocks.
05. The Goldman Sachs Group, Inc. (NYSE:GS)
Price Reaction after the Price Target Cut: -6.46 (-1.92%)
On September 21, Citigroup adjusted its price target for The Goldman Sachs Group, Inc. (NYSE:GS) from $400.00 to $380.00, signaling a more conservative outlook for the stock’s future valuation. Despite this downward revision, Citigroup has maintained its “Neutral” rating on The Goldman Sachs Group, Inc. (NYSE:GS), indicating a balanced stance and a lack of strong recommendations for buying or selling the stock. As of the latest data, The Goldman Sachs Group, Inc. (NYSE:GS) current stock price stands at $330.09, reflecting a 2.0% decrease in response to Citigroup’s target adjustment. This development highlights the ongoing uncertainty surrounding The Goldman Sachs Group, Inc. (NYSE:GS) market performance and analysts’ cautious sentiment regarding its prospects.
Manole Capital Management made the following comment about The Goldman Sachs Group, Inc. (NYSE:GS) in its Q3 2022 investor letter:
“Back in 2019, The Goldman Sachs Group, Inc. (NYSE:GS) made a splash in the card industry by working with Apple and MasterCard on a credit card. The actual card is fairly sleek (as you can see below), as customers names are etched into an Apple titanium card. The no-fee card generated a lot of hype, as many early users were quick to post their latest card on various social media sites.
The initial goal of Marcus (back in 2016) was to leverage Goldman’s wonderful name brand and build a full-service digital bank. This card was a large piece of GS’s ambitions to grow its retail banking franchise called Marcus. After 5 years, Marcus now has 14 million customers and $16 billion in loan balances. Surprisingly, Marcus now represents nearly 20% of the firm’s total revenue.
We thought it would be interesting to look how the Apple Card is doing in terms of loans and exposures. With over $100 billion in assets, this has been a successful source of cheap deposits for GS. Despite having an institutional / “white shoe” brand in the investment banking and trading world, GS’s Apple Card has been a disappointment.” (Click here to read the full text)
04. Upstart Holdings, Inc. (NASDAQ:UPST)
Price Reaction after the Price Target Cut: -0.75 (-2.69%)
Upstart Holdings, Inc. (NASDAQ:UPST) operates in the financial technology (FinTech) sector. It specializes in artificial intelligence and machine learning to provide lending and credit services. Upstart Holdings, Inc. (NASDAQ:UPST) utilizes technology to make more accurate lending decisions and streamline the loan approval. On September 21, B. Riley revised its price target for Upstart Holdings, Inc. (NASDAQ:UPST) shares from $49.00 down to $36.00, marking a notable reduction in their outlook for the stock’s potential value. Despite this adjustment, B. Riley has maintained its “Neutral” rating for Upstart Holdings, Inc. (NASDAQ:UPST), indicating a stance of neither strong endorsement nor discouragement for investors. At the time of the latest update, Upstart Holdings, Inc. (NASDAQ:UPST) stock is trading at $27.09, representing a 2.7% decline in response to B. Riley’s target price revision.
Here is what Vulcan Value Partners has to say about Upstart Holdings Inc. (NASDAQ:UPST) in its Q2 2022 investor letter:
“Upstart Holdings Inc. was a material detractor for the quarter. It was a mistake, and we sold our position. Upstart is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models that are designed to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. When we purchased Upstart, we believed the company had an excellent product and the addressable market was large.
Upstart’s results during 2021 were impressive. In the first quarter of 2022, the company reported solid results but lowered guidance and, more importantly, used its balance sheet to warehouse loans temporarily. The company’s decision to use its balance sheet to finance its growth surprised us and other market participants, and its stock price decreased dramatically. While we admire the management team, we are less confident in the company’s long-term prospects.
It will be more difficult than we anticipated for Upstart to extend its competitive advantages with smaller banks into adjacent markets such as auto loans and mortgages. As a result, our value for Upstart is unstable and the company no longer qualifies for investment. We are following our discipline and reallocating capital into companies with more stable values.”
03. Extra Space Storage Inc. (NYSE:EXR)
Price Reaction after the Price Target Cut: -4.95 (-3.88%)
Extra Space Storage Inc. (NYSE:EXR) belongs to the real estate investment trust (REIT) sector, specifically within the self-storage REIT industry. The company specializes in owning and operating self-storage facilities across the United States. On September 21, Morgan Stanley lowered its price target for Extra Space Storage Inc. (NYSE:EXR) shares from $145.00 to $115.00, signifying a reduction in their outlook for the stock’s potential value. Morgan Stanley has also maintained its “Underweight” rating for EXR, indicating a bearish stance on the stock, suggesting it may underperform relative to other investments. Following this update, Extra Space Storage’s stock is trading at $122.58, reflecting a 3.9% decline in response to Morgan Stanley’s target price adjustment. This news highlights the cautious sentiment among analysts regarding the performance of self-storage REITs like Extra Space Storage Inc. (NYSE:EXR).
Baron Real Estate Fund made the following comment about Extra Space Storage Inc. (NYSE:EXR) in its second quarter 2023 investor letter:
“Following its pending merger with Life Storage, Inc. which is expected to close late in 2023, Extra Space Storage Inc. (NYSE:EXR), a best-in-class self-storage REIT, will be the largest self-storage operator with a $46 billion self-storage operating portfolio. In the most recent quarter, the shares declined because rent growth is moderating from its strong pace of the last few years.
Though 2023 may be a transition year for Extra Space as growth retraces to a more sustainable run-rate and the management team prepares to incorporate Life Storage, we remain optimistic about the long-term prospects for the company and believe the current price of its shares reflects a good portion of this anticipated transition.
We believe Extra Space’s management team is excellent. Over the last decade, management has delivered strong occupancy gains, rent growth, and expense control that has led to a cost-of-capital advantage relative to its peers. Management has capitalized on its cost-of-capital advantage relative to its peers by tripling its owned self-storage count since 2010. We believe the management team will continue to create tremendous value for shareholders and believe the long-term growth opportunity for the company remains strong.”
02. KB Home (NYSE:KBH)
Price Reaction after the Price Target Cut: -2.06 (-4.29%)
KB Home (NYSE:KBH) operates in the residential construction industry, specifically as a homebuilding company. They are involved in designing and constructing homes for various market segments, including first-time homebuyers, move-up buyers, and active adult homebuyers. On September 21, Wedbush adjusted its price target for KB Home (NYSE:KBH) stock from $64.00 to $55.00, indicating a lowered expectation for its potential value. However, it’s noteworthy that Wedbush has maintained its “Outperform” rating for KB Home (NYSE:KBH), suggesting that they still believe the stock has the potential to outperform the market despite the reduced target price. As of the latest data, KB Home (NYSE:KBH) stock is trading at $46.01, reflecting a 4.3% decrease in response to Wedbush’s target price revision. This news illustrates the cautious sentiment among analysts regarding the residential construction industry and its challenges.
01. Alcoa Corporation (NYSE:AA)
Price Reaction after the Price Target Cut: -1.51 (-5.14%)
Alcoa Corporation (NYSE:AA) operates in the aluminum industry, specializing in producing aluminum and aluminum-related products. On September 21, Morgan Stanley reduced its price target for Alcoa Corporation (NYSE:AA) from $31.00 to $28.00, indicating a lowered expectation for the stock’s potential value. Morgan Stanley has also maintained its “Underweight” rating for Alcoa Corporation (NYSE:AA), which implies a bearish outlook on the stock, suggesting it may underperform relative to other investments. Following this update, Alcoa Corporation (NYSE:AA) stock is trading at $27.87, reflecting a 5.1% decline in response to Morgan Stanley’s target price adjustment. This development underscores the cautious sentiment among analysts regarding the aluminum industry and Alcoa Corporation (NYSE:AA) performance within it.
ClearBridge Investments made the following comment about Alcoa Corporation (NYSE:AA) in its Q3 2022 investor letter:
“We bought Alcoa Corporation (NYSE:AA), a leading aluminum producer, after the stock sold off over lower commodity prices. The current price of aluminum is unsustainably low, below its cost of production, despite inventories being at historic lows. We believe these depressed prices are due to the evaporation of Chinese demand resulting from its zero COVID-19 policy, but that it will likely recover over the next few quarters.
Additionally, Alcoa is leading the industry in reducing carbon emissions from its smelting process which is helping to improve its cost position relative to global competitors. Given its compelling valuation and strong free cash flow yield, we are confident in the company as it is increasingly relied upon to meet the growing structural demand from electrification and the global energy transition.”
Disclosure: None. You can also take a look at 10 Best Lithium ETFs and 20 Countries with Highest Rice Consumption Per Capita.
