Analysts on Wall Street Lower Ratings for These 10 Stocks

Published August 31, 2023 at 11:41 pm EDT Updated September 7, 2026 at 12:03 pm EDT

In this article, we will discuss the 10 stocks recently downgraded by analysts.

The global economy is poised for a slowdown due to persistently higher inflation than anticipated, with potential pockets of resilience, according to Moody’s Investors Service. Marie Diron, Managing Director for Global Sovereign and Sub-Sovereign Risk at Moody’s, indicated that the slowdown is influenced by three key factors. These include sustained elevated interest rates, China’s decelerating growth, and pressures on the financial system. Diron mentioned that central banks have successfully guided the global economy and fostered a disinflationary trend by raising interest rates. However, the concern of sticky inflation remains, which could lead to extended periods of slow growth if not addressed. Another risk stems from stress within the financial system. While banks have managed to handle higher rates, there’s potential for strains to emerge, possibly in the later part of this year or next. China also contributes to the vulnerability. Moody’s anticipates prolonged sluggish growth in the world’s second-largest economy, impacting the broader region and potentially influencing default rates. Despite the anticipated slowdown, Moody’s identifies certain “pockets of resilience.” Diron highlights the favorable conditions and robust growth potential in markets like India and Indonesia. Indonesia, with its abundant natural resources, including essential materials for electric vehicle production, has the chance to develop its downstream sectors and leverage its resources effectively.

The Nasdaq Composite marked its fifth consecutive positive day on August 30 but endured its largest monthly loss in 2023. Closing Thursday’s session at 14,034.97, the tech-heavy index rose by 0.11%. The Dow Jones Industrial Average dropped 0.48% to 34,721.91, and the S&P 500 decreased by 0.16% to 4,507.66. Despite recent gains trimming monthly losses, the S&P 500 faced a 1.77% drop, the Nasdaq lost 2.17%, and the Dow fell 2.36% in August. Examining U.S. inflation data, the core personal consumption expenditures (PCE) index increased by 0.2% in July and 4.2% year over year, aligning with predictions. This is a significant inflation indicator for the Federal Reserve. Joseph Cusick of Calamos Investments highlighted that equity movements are influenced by bonds, specifically U.S. Treasury yields, with a decline potentially supporting stock gains. Salesforce saw a 3% increase after reporting strong fiscal results and optimistic third-quarter guidance. With non-farm payroll data set to be released on Friday morning, traders await insights into the economy’s trajectory. Economists predict 170,000 job additions, hoping the report will indicate a meaningful economic slowdown, potentially leading the central bank to reconsider benchmark interest rate hikes.

Oil is set for a weekly rise as Russia signals export cuts extension and US inventories decline. West Texas Intermediate (WTI) crude is stable above $83 per barrel, up almost 5% this week. Russia’s OPEC+ agreement for further export reductions will be detailed next week, while a similar move is anticipated from Saudi Arabia. The collaboration between OPEC and allies to reduce shipments has led to lower US crude stockpiles. Recent government data showed a draw of over 10 million barrels this week, the lowest since December. Oil’s climb this week helped the US benchmark secure a third straight monthly gain, supported by expectations of fewer rate hikes by the Federal Reserve and Beijing’s measures to boost its economy in Asia. Underlying indicators suggest tighter market conditions, with WTI’s three-month spread in a bullish pattern, the largest since November.

On the stocks market front, notable stocks such as Palantir Technologies Inc. (NYSE:PLTR) and Dollar General Corporation (NYSE:DG) were downgraded by analysts, among many others. Check out the complete article to see some other stocks recently downgraded by analysts.

Analysts on Wall Street Lower Ratings for These 10 Stocks

10. Victoria’s Secret & Co. (NYSE:VSCO)

Price Reaction after the Downgrade: +1.24 (+6.91%)

Victoria’s Secret & Co., a prominent retail brand, faced a significant shift on August 31 when Wells Fargo & Company downgraded its stock rating. This move departed from the previous “Overweight” stance, shifting towards a more balanced “Equal Weight” outlook aligned with market expectations. The downgrade’s immediate impact was evident in the adjustment of the Victoria’s Secret & Co. price target. The original target of $34.00, linked to the “Overweight” classification, was revised downward to $18.00, reflecting the updated recommendation. Additionally, the current share price of $19.18 highlights that the stock is considered overvalued, with a subsequent +6.9% change indicating the degree of adjustment prompted by the revised recommendation.

Similar to how Palantir Technologies Inc. and Dollar General Corporation faced downgrades by analysts, Victoria’s Secret & Co. has also been subject to such a downgrade.

09. Hostess Brands, Inc. (NASDAQ:TWNK)

Price Reaction after the Downgrade: +0.42 (+1.50%)

On August 31, Hostess Brands, Inc. (NASDAQ:TWNK) underwent a significant development as JPMorgan Chase & Co. lowered its stock rating. This strategic alteration signified a notable shift in perspective regarding the company’s performance outlook. Having previously held an “Overweight” classification, which indicated an optimistic stance on the stock’s potential, Hostess Brands, Inc. rating was revised to “Neutral” by JPMorgan Chase & Co. This adjustment reflects a more balanced viewpoint that aligns with market expectations, suggesting that the stock’s growth trajectory might now better correlate with the overall market trend. The stock’s price reflected the immediate market response to this downgrade, which experienced a modest 1.5% increase from $28.00 to $28.48. This subtle adjustment underscores the market’s sensitivity to analyst opinions, highlighting the pivotal role that such assessments play in shaping investor sentiment and influencing market dynamics.

Carillon Tower Advisers made the following comment about Hostess Brands, Inc. in its Q3 2022 investor letter:

“Hostess Brands, Inc. (NASDAQ:TWNK) manufacturers baked sweet goods. Some of its most well-known and popular products are Donettes, Twinkies, and HoHos. Investors rewarded the company for managing cost inflation better than peers and for continuing to gain market share in key distribution channels.”

08. MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT)

Price Reaction after the Downgrade: 0.00 (0.00%)

On August 31, MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), a prominent company specializing in boat manufacturing experienced a significant market shift. This change was triggered by a downgrade in its stock rating by B. Riley, a strategic move that indicated a notable shift in perspective regarding the company’s future performance. Previously categorized as a “Buy,” which denoted a positive outlook on the stock’s potential, MasterCraft Boat Holdings, Inc. rating was adjusted to “Neutral” by B. Riley. This adjustment signifies a more balanced viewpoint, suggesting that the stock’s growth trajectory may now align more closely with the overall market trend. The analyst revised the price target from $37.00 to $23.00 in conjunction with the downgrade. The immediate market response was observed in the stock’s current price of $21.76, reflecting the combined impact of the analyst’s downgrade and the revised price target.

Just like Palantir Technologies Inc. and Dollar General Corporation, MasterCraft Boat Holdings, Inc. has also encountered an analyst-initiated downgrade.

07. Kanzhun Limited (NASDAQ:BZ)

Price Reaction after the Downgrade: -0.09 (-0.60%)

On August 31, Kanzhun Limited (NASDAQ:BZ), a company operating in the talent recruitment industry, experienced a significant market shift. This change was brought about by a downgrade in its stock rating executed by UBS Group, a strategic move that marked a substantial shift in perspective regarding the company’s future performance. Formerly categorized as a “Buy,” signifying an optimistic outlook on the stock’s potential, Kanzhun Limited rating was revised to “Neutral” by UBS Group. This adjustment in assessment suggests a more balanced viewpoint, implying that the stock’s growth trajectory may align more closely with the broader market trend. The immediate market response was reflected in the stock’s current price of $14.80, representing a slight decrease of -0.6%. This adjustment underscores the market’s sensitivity to analyst opinions, highlighting the significant influence that such evaluations possess in shaping investor sentiment and guiding market behavior.

06. Texas Instruments Incorporated (NASDAQ:TXN)

Price Reaction after the Downgrade: -1.17 (-0.69%)

On August 30, Texas Instruments Incorporated (NASDAQ:TXN), a key player in the semiconductor industry, experienced a notable transformation in its market status. This shift was set in motion by a downgrade in its stock rating by Sanford C. Bernstein, a strategic maneuver that marked a significant alteration in perspective regarding the company’s forthcoming performance. Having previously been categorized under the “Market Perform” banner, which implied an alignment of performance with the broader market, Texas Instruments Incorporated rating underwent a shift to “Underperform”, according to Sanford C. Bernstein’s analysis. This adjustment underscores a more cautious outlook, hinting that the stock’s growth potential might now be lower than prevailing market expectations. The immediate market response was discernible through the stock’s price, which declined by -0.7%, ultimately settling at $168.06.

The London Company Large Cap Strategy made the following comment about Texas Instruments Incorporated in its second quarter 2023 investor letter:

“Texas Instruments Incorporated (NASDAQ:TXN) – TXN shares declined 2% during the quarter. Demand was weaker in all markets except auto. While revenue was down 11% due to the slowing economy, we believe the outlook is positive. The company continues to invest in manufacturing facilities and should benefit from increased spending related to the CHIPS act. TXN is exposed to various end markets across the economy (e.g. automotive industrials). We believe growth in analog semiconductor content demand, in most markets, will drive TXN.”

05. Medical Properties Trust, Inc. (NYSE:MPW)

Price Reaction after the Downgrade: -0.12 (-1.63%)

On August 31, Medical Properties Trust, Inc. (NYSE:MPW), a significant player in the healthcare real estate sector, encountered a notable shift in its market position. This transformation was initiated by a downgrade in its stock rating by Mizuho, a strategic move that marked a substantial alteration in perspective regarding the company’s prospective performance. Formerly categorized as a “Buy,” a designation indicating positive expectations for the stock’s potential, Medical Properties Trust, Inc. rating was revised to “Neutral” by Mizuho. This adjustment highlights a more balanced viewpoint, implying that the stock’s growth trajectory may align more with prevailing market trends. The immediate market response became apparent as the stock’s price experienced a decline of -1.6%, ultimately reaching $7.22.

Miller Value Partners Income Strategy made the following comment about Medical Properties Trust, Inc. in its second quarter 2023 investor letter:

“Medical Properties Trust, Inc. (NYSE:MPW) gained after it reported 1Q23 revenues of $350.2MM, -14.5% Y/Y, below consensus of $352.5MM, and Normalized Funds from Operations (FFO)/share of $0.37, -21.3% Y/Y, slightly below consensus of $0.38. The company’s CEO noted “The terms of recently announced transactions including Springstone, the acquisition by CommonSpirit of Steward’s Utah operations, Healthscope, and Prime, have valued our hospital investments near and in excess of our original purchase prices. This confirmation of our underwritten asset values by sophisticated market participants, as well as our existing liquidity and prudently planned debt structure, position us to have no debt maturities until 2025.” The REIT saw a modest uptick in leverage during the quarter, with the company’s Adjusted Net Debt to Annualized Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (EBITDAre) ratio standing at 6.5x as of quarter-end, compared to 6.4x as of 12/31/22. Management maintained its quarterly dividend of $0.29/share, or a 12.5% annualized yield. Management updated full-year 2023 (FY23) guidance for Normalized FFO/share of $1.56 (vs. prior guidance for $1.58), implying a P/FFO multiple of 5.9x, to account for the impact of announced deleveraging asset sales (and expected $1.4B in debt reduction).”

04. Ero Copper Corp. (NYSE:ERO)

Price Reaction after the Downgrade: -0.83 (-3.86%)

On August 31, Ero Copper Corp. (NYSE:ERO), a prominent player in the mining industry, found itself amid a significant market shift. This transformation was initiated by a deliberate decision from Scotiabank to downgrade its stock rating, signifying a notable change in perspective regarding the company’s potential performance. Having previously held the distinction of being a “Sector Outperform,” which pointed towards positive expectations for the stock’s performance within its sector, Ero Copper Corp. rating was adjusted down to “Sector Perform” by Scotiabank. This recalibration signifies a more impartial viewpoint, indicating that the trajectory of the stock’s growth might align more closely with the broader performance trends prevalent in its sector. The immediate reaction from the market was mirrored in the stock’s present value of $20.68, which underwent a decline of -3.9%.

03. Palantir Technologies Inc. (NYSE:PLTR)

Price Reaction after the Downgrade: -1.35 (-8.27%)

On August 31, Palantir Technologies Inc., a prominent figure in the technology sector, encountered a significant transformation in its market position. This change was prompted by a strategic decision from Morgan Stanley to downgrade its stock rating, marking a notable shift in perspective regarding the company’s potential performance. Having been categorized as “Equal Weight,” which indicated a balanced assessment of the stock, Palantir Technologies Inc. rating was revised to “Underweight” by Morgan Stanley. This shift in perspective implies a more cautious viewpoint, suggesting that the stock’s growth trajectory may now face headwinds compared to prevailing market expectations. Of particular significance, the price target for the stock also changed from $8.00 to $9.00 as part of the downgrade. This adjustment adds an additional layer of insight, highlighting the comprehensive evaluation carried out by analysts as they gauge the stock’s potential within the market. The immediate market response was discernible in the stock’s current price of $14.98, which experienced a substantial decline of -8.3%.

02. Gaotu Techedu Inc. (NYSE:GOTU)

Price Reaction after the Downgrade: -0.3600 (-11.11%)

On August 31, Gaotu Techedu Inc. (NYSE:GOTU), a significant player in the education technology sector, experienced a notable market shift. This shift was instigated by a downgrade in its stock rating by CLSA. Previously classified as an “Outperform,” indicating positive expectations for the stock’s potential, Gaotu Techedu’s rating was altered to “Underperform” by CLSA. This shift underscores a more cautious viewpoint, suggesting that the stock’s growth trajectory might now face challenges compared to prevailing market expectations. Significantly, the price target for the stock also experienced a change from $3.32 to $3.30 as part of the downgrade. This adjustment adds a layer of insight, demonstrating the comprehensive analysis conducted by analysts as they evaluate the stock’s potential within the market. The immediate market response became evident through the stock’s current price of $2.88, which encountered a significant decrease of -11.1%.

Here is what Bireme Capital has to say about Gaotu Techedu Inc. in its Q3 2021 investor letter:

“GSX (now GOTU), a Chinese education company which was accused of falsifying a majority of its online customer base, has seen its share price whipsaw in 2021 from $50 to $140 to today’s price of below $4. The plunge began in early March, as GSX announced earnings results that included a wider quarterly loss and a 30% weaker Q2 revenue forecast than Wall Street had expected.

Then a few weeks later rumors surfaced of an impending regulatory crackdown on for-profit education companies in China. Simultaneously one of their largest shareholders, Archegos Capital Management, was collapsing. Archegos’s margin calls forced their brokers to sell massive blocks of shares in various tech and media stocks, including GSX, which seems to have hastened the price decline.The final nail in the coffin for GSX came on 7/23, when Chinese regulators banned for-profit after-school tutoring.”

01. Dollar General Corporation (NYSE:DG)

Price Reaction after the Downgrade: -19.16 (-12.15%)

On August 31, Dollar General Corporation, a significant player in the retail sector, underwent a substantial market transformation. This shift was initiated by a downgrade in its stock rating by Oppenheimer, a strategic decision that marked a noteworthy change in perspective regarding the company’s potential performance. Formerly characterized as an “Outperform,” indicating positive expectations for the stock’s potential, Dollar General Corporation rating was revised to “Market Perform” by Oppenheimer. This adjustment signifies a more neutral viewpoint, suggesting that the stock’s growth trajectory might now align more closely with the prevailing market trends. The immediate market response was reflected in the stock’s current price of $138.50, experiencing a significant decrease of -12.2%.

Here is what Aristotle Atlantic Partners has to say about Dollar General Corporation in its Q2 2023 investor letter:

“We sold our position in Dollar General, following a weaker-than-expected quarterly earnings report and a lowered earnings outlook. The company’s core consumer, while still employed, continues to be impacted by higher inflation. Additionally, we saw the negative impacts of lower-than-expected tax refunds and reductions in the Federal Supplemental Nutrition Assistance Program (SNAP). Dollar General remained committed to spending on customer experience and investing in price to help their customers through the tougher economic environment, as a result, reducing the earnings guidance by a greater amount than the sales reductions.”

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