In this article, we discuss the 5 stocks that recently received price-target cuts from analysts. If you want to see some other companies receiving downgrades, go directly to Analysts Just Trimmed Their Price Targets of These 10 Stocks.
5. Qorvo, Inc. (NASDAQ:QRVO)
Number of Hedge Fund Holders: 33
Shares of Qorvo, Inc. (NASDAQ:QRVO) fell over three percent on Monday, July 11, 2022, after Cowen trimmed its price target for the Greensboro-based semiconductor company from $150 per share to $108 per share.
Cowen analyst Matthew Ramsay expects the current macro environment to negatively impact the global smartphone market. Ramsay lowered his smartphone shipment outlook for the current and next year. He also downgraded Qorvo, Inc. (NASDAQ:QRVO) from “Outperform” to “Market Perform.”
Earlier this year, investment management firm Vulcan Value Partners mentioned Qorvo, Inc. (NASDAQ:QRVO) in its first-quarter 2022 investor letter, stating:
“Qorvo Inc. is one of the two major providers of radio frequency RF systems which are critical components of mobile devices including smart phones and the Internet of Things (IoT). Two transitory concerns have recently affected the company’s stock price. First, supply chain issues continue to be a constraint. Second, Apple recently announced its decision to decrease production of its iPhone SE model. Neither of these issues threatens their long-term competitive position. Qorvo’s value is stable and despite the recent pressure on the stock price, we feel its long-term prospects are promising.”
4. Insulet Corporation (NASDAQ:PODD)
Number of Hedge Fund Holders: 40
Shares of Insulet Corporation (NASDAQ:PODD) fell for two straight days after Citigroup trimmed its price target for the Massachusetts-based medical device company from $310 per share to $250 per share on Monday, July 11, 2022.
Citi analyst Joanne Wuensch expects a tough second quarter for the medical supply and technology group, which includes Insulet Corporation (NASDAQ:PODD). Wuensch also pointed towards difficult year-over-year comparisons and increasing macro headwinds. She downgraded Insulet Corporation (NASDAQ:PODD) from “Buy” to “Neutral.”
Insulet Corporation (NASDAQ:PODD) also appeared in the first-quarter 2022 investor letter of investment management firm ClearBridge Investments. The letter stated:
“Health care has always been a core foundation of the portfolio and we have been diversifying our health care exposure to include services and solutions beyond our traditional overweight to biopharmaceuticals and managed care. We first purchased Insulet (NASDAQ:PODD), a leading provider of insulin pumps for diabetes patients, in the fourth quarter of 2021, and we have aggressively added to the position since then. The company is currently the only meaningful manufacturer of patch pumps, the preferred form factor for many patients as compared to traditional tubed pumps. We believe Insulet has a long runway for growth given its large and underpenetrated market, which is only one-third penetrated in Type 1 diabetes and low-single-digit penetrated in the insulin- intensive Type 2 diabetes population. Additionally, we see the launch of the company’s next generation offering, Omnipod 5, which received FDA clearance in January, as an accelerant to growth. Insulet has strong gross margins and is profitable today, though we still see room for significant operating margin expansion ahead.”
3. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 44
Shares of Lululemon Athletica Inc. (NASDAQ:LULU) declined nearly four percent on Monday, July 11, 2022, following a price-target cut from Jefferies. The research firm lowered its price target for the athletic apparel retailer from $375 per share to $200 per share, citing intensifying competition and growing headwinds.
Jefferies analyst Randal Konik said Lululemon Athletica Inc. (NASDAQ:LULU) now faces tough comparisons due to strong sales last year. The company benefitted from the elevated demand for comfortable clothing as an increasing number of people switched to remote working during the pandemic. Konik also downgraded Lululemon Athletica Inc. (NASDAQ:LULU) from “Hold” to “Underperform.”
2. Capital One Financial Corporation (NYSE:COF)
Number of Hedge Fund Holders: 56
Morgan Stanley decreased its price target for Capital One Financial Corporation (NYSE:COF) from $152 per share to $126 per share on Tuesday, July 12, 2022. Morgan Stanley analyst Betsy Graseck also downgraded Capital One Financial Corporation (NYSE:COF) from “Overweight” to “Equal Weight,” citing increasing recession risk. In addition, Graseck expects a drop in consumer spending amid record inflation.
Separately, Capital One Financial Corporation (NYSE:COF) appeared in the fourth-quarter 2021 investor letter of investment management firm Davis Funds. The firm said:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Capital One Financial.”
1. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 89
Shares of Union Pacific Corporation (NYSE:UNP) slipped nearly two percent on Tuesday, July 12, 2022, after JPMorgan reduced its price target for the railroad holding company from $272 per share to $232 per share.
JPMorgan analyst Brian Ossenbeck thinks that the growth of Union Pacific Corporation (NYSE:UNP) has been hampered by staffing challenges and disruptions across its important end markets. Ossenbeck also downgraded Union Pacific Corporation (NYSE:UNP) from “Overweight” to “Neural.”
You can also take a peek at Investors Are Watching These 10 Biotech Stocks and Jim Cramer Recommends These 10 Stocks For Recession.
