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. PTC Therapeutics, Inc. (NASDAQ:PTCT)
Price Reaction after the Downgrade: +0.08 (+0.29%)
On December 19, Morgan Stanley analyst Jeffrey Hung downgraded PTC Therapeutics, Inc. (NASDAQ:PTCT) from Equalweight to Underweight, within the biotechnology industry. Alongside the downgrade, the analyst set a price target of $28.00. The downgrade indicates a more cautious view on PTC Therapeutics, Inc. (NASDAQ:PTCT) potential compared to the previous Equalweight rating. Despite the downgrade, the market response was a minimal positive price reaction, as indicated by a +0.08 (+0.29%) increase. This modest reaction could be interpreted in various ways, such as investors viewing the downgrade as less severe than anticipated, or other factors influencing the stock’s performance on that day. Hung’s note highlighted that while the sepiapterin profile in phenylketonuria (PKU) remains compelling, the firm sees better risk-adjusted opportunities elsewhere in its pharmaceutical coverage. This strategic decision is attributed to greater uncertainty stemming from regulatory headwinds faced by multiple programs.
TimesSquare U.S. Small Cap Growth Strategy made the following comment about PTC Therapeutics, Inc. (NASDAQ:PTCT) in its Q2 2023 investor letter:
“PTC Therapeutics, Inc. (NASDAQ:PTCT), a biopharmaceutical company focused on the discovery and development of medicines for patients with rare disorders, lost -16%. During the quarter, management reported their phase III trial for Friedreich’s ataxia (FA) did not achieve statistical significance. They also announced a strategic reorganization of their pipeline and have chosen to discontinue pre-clinical gene therapy projects in both FA and Angelman’s Syndrome. Headcount will be reduced as the new CEO prefers to deploy capital more thoughtfully.”
04. Equinor ASA (NYSE:EQNR)
Price Reaction after the Downgrade: -0.05 (-0.16%)
On December 19, RBC Capital Markets analyst Biraj Borkhataria downgraded Equinor ASA (NYSE:EQNR) from Outperform to Sector Perform within the energy industry. Equinor ASA (NYSE:EQNR) is a major player in the oil and gas sector, engaged in exploration, production, refining, and renewable energy. Following the downgrade, the market response was a slight negative price reaction, as indicated by a -0.05 (-0.16%) decrease. This modest reaction suggests that investors may have perceived the downgrade as expected or in line with market conditions. The Sector Perform rating implies that RBC Capital Markets sees Equinor ASA (NYSE:EQNR) performance aligning more closely with the overall market expectations, and it is not advocating for a more bullish or bearish stance at the moment.
03. SiteOne Landscape Supply, Inc. (NYSE:SITE)
Price Reaction after the Downgrade: -0.64 (-0.39%)
On December 19, Stifel analyst W. Andrew Carter downgraded SiteOne Landscape Supply, Inc. (NYSE:SITE) from Buy to Hold within the landscaping and garden supplies industry. SiteOne Landscape Supply, Inc. (NYSE:SITE) is a major distributor of landscape supplies and related products. The downgrade was accompanied by a revised price target of $167.00, increased from $150.00. Despite the increased price target, the market response was a slight negative price reaction, as indicated by a -0.64 (-0.39%) decrease. This modest reaction could be interpreted in various ways, such as investors viewing the downgrade as less favorable than anticipated or other factors influencing the stock’s performance on that day. The Hold rating implies that Stifel sees SiteOne Landscape Supply, Inc. (NYSE:SITE) performance as aligning more closely with the overall market expectations, and the increased price target could suggest some level of positive outlook despite the change in the analyst’s rating.
Alger Weatherbie Specialized Growth Fund made the following comment about SiteOne Landscape Supply, Inc. (NYSE:SITE) in its Q2 2023 investor letter:
“SiteOne Landscape Supply, Inc. (NYSE:SITE) is a wholesale distributor of landscaping products operating in the United States and Canada. The company offers a wide array of approximately 120.000 stock keeping units (SKUS), featuring irrigation supplies, fertilizers, control products, landscape accessories, nursery goods, and outdoor lighting. They also supply hardscape materials like pavers, natural stones, and blocks, as well as ice melt products. During the period, the company reported strong fiscal first quarter results. Despite unprecedented rain in the western region causing a near-term headwind, quarterly revenues came in above consensus estimates driven by strength in the southern region.”
02. PepsiCo, Inc. (NASDAQ:PEP)
Price Reaction after the Downgrade: -0.96 (-0.57%)
On December 19, JPMorgan analyst Andrea Teixeira downgraded PepsiCo, Inc. (NASDAQ:PEP) from Overweight to Neutral and reduced the price target from $185.00 to $176.00. This action was taken in conjunction with the release of JPMorgan’s 2024 Year Ahead Outlook. PepsiCo, Inc. (NASDAQ:PEP) operates in the consumer goods industry, primarily focused on beverages and snacks. In the downgrade note, Teixeira acknowledged that there are no fundamental issues with PepsiCo, Inc. (NASDAQ:PEP) and expressed confidence in the company’s ability to achieve its 2024 outlook. This outlook includes a high-end projection of its long-term financial algorithm, featuring 4-6% organic sales growth and high single-digit foreign exchange-neutral earnings per share (EPS) growth. Despite this confidence, the analyst believes that the potential for upward estimate revisions is diminishing, prompting the downgrade. The market response to the downgrade was a negative price reaction, as indicated by a -0.96 (-0.57%) decrease. This could be interpreted in various ways, such as investors adjusting their positions based on the analyst’s outlook or other factors influencing the stock’s performance on that day.
01. Cameco Corporation (NYSE:CCJ)
Price Reaction after the Downgrade: -2.57 (-5.55%)
On December 19, Cantor Fitzgerald downgraded Cameco Corporation (NYSE:CCJ), a company operating in the uranium mining industry, from Buy to Hold. Cameco Corporation (NYSE:CCJ) is a major player in the production and exploration of uranium for nuclear power generation. The downgrade was accompanied by a negative price reaction, as indicated by a -2.57 (-5.55%) decrease. This significant decrease suggests that investors may have reacted strongly to the downgrade, adjusting their positions based on Cantor Fitzgerald’s revised outlook for Cameco Corporation (NYSE:CCJ).
Meridian Contrarian Fund made the following comment about Cameco Corporation (NYSE:CCJ) in its Q3 2023 investor letter:
“Cameco Corporation (NYSE:CCJ) is a global leader in the mining, fabricating, and refining of uranium products for nuclear power plants around the world. We believe Cameco has the lowest costs, highest grade reserves, and most favorably located mines. Cameco was out of favor with investors for over a decade following the 2011 Fukushima nuclear disaster which halted growth of new nuclear development and caused several countries to shut down nuclear power production. With lower demand, uranium prices fell precipitously and stagnated. We invested in Cameco in 2020 with the thesis that global production had fallen to a level below global demand which should eventually cause uranium prices to rise, benefiting Cameco’s earnings.
We also believed that there was upside optionality in the form of potentially resurgent interest in nuclear power. Several important factors support our belief. Nuclear power is clean with zero carbon emissions or other airborne pollutants, and highly reliable as nuclear plants operate 24/7 for several decades Past performance is no guarantee of future results. Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus contains this and other information relevant to an investment in the fund. Please read the prospectus carefully before you invest or send money. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.855.3434 or access the website at www.arrowmarkpartners.com/meridian. Not FDIC-Insured, Not Bank Guaranteed, May Lose Value 437 57 100 300 914 Number of Nuclear Plants Expected to Double Current Under Construction Planned Proposed Current + Proposed 180 218 350 150 160 180 Current 2030 2040 Current and Projected Supply/Demand Imbalance (Uranium Mlbs) Demand Supply decades. Modern nuclear plants are far more resistant to natural disasters than the Fukushima plant which was built in the 1970s. Small modular reactors (SMRs) are a new format of plant that can be built more cheaply and quickly than traditional plants and are also safer. Modern nuclear waste disposal technology is safe and highly effective. Due to these factors, many countries are extending the lives of their nuclear plants rather than shutting them down, and there are at least 57 new nuclear plants under construction, 100+ planned, and more than 300 proposed compared to the current installed base of 437. Based on this, projected uranium demand is expected to significantly increase while supply will continue to be constrained. This supply/demand imbalance should be very positive for uranium prices, in our view. During the quarter, the stock performed well as uranium spot prices increased by 25%. As contracted prices catch up to spot pricing, we project that Cameco could generate significant earnings and free cash flow gains. We believe Cameco is attractive at current prices. There could also be further upside to earnings from Cameco’s investment in the nuclear division of Westinghouse, which should benefit from new development activity. As such, we maintained a large position in Cameco stock.“
Disclosure: None. You can also take a look at 14 Best Automation Stocks To Buy Now and Hedge Funds Say These Penny Stocks Are Poised to Explode.
