In this article, we discuss the 5 stocks receiving downgrades from analysts. If you want to see more such stocks on the list, go directly to Analysts on Wall Street Lower Ratings for These 10 Stocks.
05. Altice USA, Inc. (NYSE:ATUS)
Price Reaction after the Downgrade: -0.1250 (-5.1440%)
On April 9, BNP Paribas analyst Kohulan Paramaguru made a significant adjustment to Altice USA, Inc. (NYSE:ATUS), downgrading the stock from a “neutral” rating to an “underperform” rating, with a revised price target of $1.00. This downgrade prompted a notable price reaction, with Altice USA shares declining by 5.1440% as of midday on April 10. Altice USA, Inc. (NYSE:ATUS), together with its subsidiaries, operates as a provider of broadband communications and video services across the United States, Canada, Puerto Rico, and the Virgin Islands. Its offerings encompass broadband, video, telephony, and mobile services, catering to both residential and business customers. The company’s video services encompass a wide array of offerings, including broadcast stations, cable networks, over-the-top services, video-on-demand, high-definition channels, digital video recorder, pay-per-view services, and mobile application-based video programming platforms. The latest earnings results for Altice USA, Inc. (NYSE:ATUS) were released on Wednesday, February 14. The company reported an earnings per share of -$0.26 for the quarter, falling short of analysts’ consensus estimates of $0.07 by a substantial margin of -$0.33. Altice USA, Inc. (NYSE:ATUS) also exhibited a negative return on equity of 12.81% and a net margin of 0.58%. Despite generating revenue of $2.30 billion during the quarter, slightly surpassing analyst estimates of $2.29 billion, the company experienced a 2.9% decline in revenue compared to the same quarter in the previous year. The decision by BNP Paribas to downgrade Altice USA to an “underperform” rating reflects a cautious outlook on the company’s performance. With the adjusted price target of $1.00, investors may reevaluate their positions in light of the revised assessment, considering the company’s recent financial results and the analyst’s revised expectations for its future trajectory.
04. Medical Properties Trust, Inc. (NYSE:MPW)
Price Reaction after the Downgrade: -0.2250 (-5.2570%)
On April 10, Colliers Securities made significant adjustments to its evaluation of Medical Properties Trust, Inc. (NYSE:MPW), a real estate investment trust (REIT) specializing in net-leased hospital facilities. The firm downgraded the stock from a “buy” rating to a “neutral” rating and slashed its price target for the company from $10 to $4.25. This decision triggered a notable price reaction, with Medical Properties Trust, Inc. (NYSE:MPW) shares declining by 5.2570% as of midday on April 10. In recent developments, Medical Properties Trust, Inc. (NYSE:MPW) announced the completion of the sale of five facilities in California and New Jersey to Prime Healthcare for an aggregate consideration of $350 million. The transaction comprises $250 million in immediate cash and a $100 million interest-bearing mortgage note payable to Medical Properties Trust in nine months. Additionally, as part of the agreement, Prime Healthcare and Medical Properties Trust, Inc. (NYSE:MPW) entered into a new 20-year master lease for the remaining four hospitals leased to Prime, which includes a $260 million purchase option. To incentivize Prime Healthcare to exercise its purchase option early in the new lease term, the parties agreed that the properties may be acquired at the $238 million lease base on or before August 26, 2028. After this date, the option price reverts to $260 million, subject to annual escalations. Medical Properties Trust, Inc. (NYSE:MPW), founded in 2003 and headquartered in Birmingham, Alabama, is a self-advised REIT focused on acquiring and developing net-leased hospital facilities. Over the years, the company has expanded significantly and has become one of the world’s largest owners of hospital real estate. As of December 31, 2023, Medical Properties Trust, Inc. (NYSE:MPW) boasts a portfolio comprising 439 facilities and approximately 43,000 licensed beds across nine countries and three continents.
03. monday.com Ltd. (NASDAQ:MNDY)
Price Reaction after the Downgrade: -13.95 (-6.47%)
On April 10, Citi made significant adjustments to its assessment of monday.com Ltd. (NASDAQ:MNDY) stock, downgrading it from Buy to Neutral while simultaneously reducing the price target from $277 to $250. This decision triggered a substantial price reaction, with monday.com Ltd. (NASDAQ:MNDY) shares declining by 6.47% as of midday on April 10. The rationale behind the downgrade stems from observations of slowing demand and a less pronounced impact from recent price increases, posing risks to the near-term outlook. This contrasts with the backdrop of high investor sentiment and valuation. While acknowledging monday.com Ltd. (NASDAQ:MNDY) strong position in terms of new product expansion, go-to-market efficiency, and spend consolidation, especially in the medium to long term, Citi expresses caution regarding investor expectations for the influence of price increases on calendar year 2024 growth. The firm believes that these expectations may be overly optimistic in the near term, prompting a view of a more balanced risk-reward at a premium valuation, thus justifying the downgrade to Neutral. Citi’s analysis is informed by recent partner conversations and web traffic analysis, revealing a deceleration in demand, extended deal cycles, and increased resistance to the company’s recent price hikes. Additionally, web traffic data indicates a slowdown in user growth, which Citi believes is not currently reflected in the stock’s valuation. Despite monday.com Ltd. (NASDAQ:MNDY) strong performance over the past year, outperforming its industry by 21 points as of April 9, 2024, and trading near the top end of its two-year range on enterprise value/revenue, Citi anticipates incremental risk to the company’s results in the near term. Looking ahead, Citi expects that monday.com Ltd. (NASDAQ:MNDY) first-quarter 2024 earnings report, anticipated in early May, will likely reveal lower results or guidance than what investors are currently expecting, primarily due to the identified slowdown in demand and user growth.
02. Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN)
Price Reaction after the Downgrade: -0.2800 (-10.5066%)
On April 9, Raymond James analyst Pavel Molchanov made significant adjustments to his evaluation of Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN), downgrading the stock from Outperform to Market Perform. This decision precipitated a substantial price reaction, with Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) shares declining by more than 10% as of midday on April 10. Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) on April 8 issued its revenue guidance for the current quarter, which fell short of analyst estimates. Slowing global distributed generation demand compelled the company to accelerate the ramp-down of inventory for its Maxeon 6 solar panels, leading to higher-than-anticipated costs. Following the release of its preliminary fourth-quarter report, Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) revealed its expectation of first-quarter revenue to be $186 million, significantly below analyst estimates of $242.3 million, despite shipments reaching 508MW. The subdued guidance reflects the ongoing challenges posed by slowing global distributed generation demand. In response, the company initiated a restructuring plan last year, which included the phased elimination of its Maxeon 6 interdigitated back contact. As part of this restructuring, the company decided to accelerate the ramp-down of all Maxeon 6 capacity, resulting in higher-than-planned restructuring costs in the fourth quarter. Although the company’s fourth-quarter revenue is expected to be $229 million, slightly below analyst estimates of $236 million, it remains within the guidance range of $220 million to $260 million provided by the company in November. Additionally, shipments in the fourth quarter are anticipated to reach 653MW, surpassing the previous guidance range of between 610MW and 650MW. The downbeat revenue guidance underscores the persistent challenges facing Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) in the face of sluggish global demand. Investors are now closely monitoring the company’s restructuring efforts and its ability to adapt to evolving market conditions.
01. Hexcel Corporation (NYSE:HXL)
Price Reaction after the Downgrade: -8.42 (-11.83%)
On April 9, BofA Securities made significant adjustments to its evaluation of Hexcel Corporation (NYSE:HXL), a prominent player in the aerospace industry, downgrading the stock from Neutral to Underperform. This decision triggered a substantial price reaction, with Hexcel Corporation (NYSE:HXL) shares declining by 11.83% as of midday on April 10. The downgrade came in response to Hexcel’s unexpected announcement of a leadership change, disclosed after the market closed on Monday. Tom Gentile, former CEO of Spirit AeroSystems (NYSE:SPR), will assume the roles of CEO and President of Hexcel starting May 1, 2024. The surprise nature of this announcement caught the market off guard, as there were no prior indications of the company’s search for new leadership. BofA Securities expressed concerns about how the market might interpret the sudden management transition. The analyst noted that the unexpected CEO change could result in a negative perception among investors, as there may be uncertainties about Hexcel’s future direction until the new leadership proves effective and the transition is complete. The revision in Hexcel Corporation (NYSE:HXL) stock rating and price target reflects the analyst’s cautious stance regarding the company’s near-term outlook. It suggests that until the new leadership demonstrates its capability and establishes a clear strategic direction, investors may remain skeptical about Hexcel’s ability to maintain its historical market premium. Hexcel Corporation (NYSE:HXL) upcoming leadership transition marks a pivotal moment for the company, signaling a new chapter as it prepares to welcome Gentile into his new role. Investors will closely monitor how the new leadership navigates the challenges and opportunities ahead, shaping Hexcel Corporation (NYSE:HXL) trajectory in the aerospace industry.
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