In this article, we discuss 5 companies that just cut their guidance. If you want to see more stocks that recently slashed guidance, check out These 10 Companies Just Cut Their Guidance.
5. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 31
United Airlines Holdings, Inc. (NASDAQ:UAL) is a Chicago-based airline that offers air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. On July 21, United Airlines Holdings, Inc. (NASDAQ:UAL)’s CEO announced that the company is in for a rough ride. In Q2, the company’s EPS of $1.43 missed consensus estimates of $1.88. The CEO warned about the industry-wide impact of a recessionary scenario, soaring fuel costs, and operational challenges for the upcoming 6 to 18 months. The company expects Q3 revenue to jump 11% and capacity to plummet 11% compared to Q3 2019, Q4 capacity to drop 10% versus Q4 2019, and 2022 full-year capacity to be down by 13%.
According to Insider Monkey’s data, 31 hedge funds were bullish on United Airlines Holdings, Inc. (NASDAQ:UAL) at the end of Q1 2022, compared to 35 funds in the prior quarter. PAR Capital Management is one of the leading stakeholders of the company, with 3.10 million shares worth $143.7 million.
4. SVB Financial Group (NASDAQ:SIVB)
Number of Hedge Fund Holders: 34
SVB Financial Group (NASDAQ:SIVB) is a California-based financial services company that offers diversified banking and financial products and services. The company posted its Q2 results on July 21, reporting earnings per share of $5.60 and a revenue of $1.53 billion, missing consensus estimates by $2.02 and $135.66 million, respectively.
On July 22, SVB Financial Group (NASDAQ:SIVB) stock plunged 15.5% to a 52-week low. The company was categorized as the most significant S&P 500 loser after a disappointing Q2 led to a full-year guidance cut. Venture capital flows have been declining after they peaked in Q3 2021. They are the biggest source of deposit for the company. In addition to that, there was weaker than forecasted growth in total client funds and higher cash burn rates. Due to poor performance and weak company outlook for the full-year, Jefferies analyst Casey Haire cut his 2022 EPS forecast for SVB Financial Group (NASDAQ:SIVB) by about 15% to $28.95, compared to a consensus of $34.94. Similarly, Wedbush analyst David Chiaverini reduced his EPS estimate for 2022 to $26.00 from $34.95 and Raymond James analyst David Long also slashed his full-year EPS estimate by $2.97 to $31.26.
According to Insider Monkey’s data, 34 hedge funds were bullish on SVB Financial Group (NASDAQ:SIVB) at the end of Q1 2022, down from 47 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is a prominent shareholder of the company, with 210,581 shares worth $117.81 million.
Here is what Diamond Hill Mid Cap Fund has to say about SVB Financial Group (NASDAQ:SIVB) in its Q1 2022 investor letter:
“Other bottom contributors included SVB Financial Group (NASDAQ:SIVB). Innovation-economy focused bank SVB Financial Group was doubly punished as financials traded down and the sell-off in technology raised concerns about slower growth for this niche bank in the near term.”
3. PacWest Bancorp (NASDAQ:PACW)
Number of Hedge Fund Holders: 35
PacWest Bancorp (NASDAQ:PACW) was founded in 1999 and is headquartered in Beverly Hills, California. It operates as the bank holding company for Pacific Western Bank. On July 21, the stock dropped by about 8% after the company reported a below consensus Q2 EPS and displayed no optimism on the H2 results. PacWest Bancorp (NASDAQ:PACW) expects loan growth in H2 to slow down on the back of higher interest rates and decelerating economic growth. For Q3, consensus EPS estimate for PacWest Bancorp (NASDAQ:PACW) stands at $1.07, down 8.93% year over year, while revenue estimate came in at $368.20 million, up 11.20% on a year over year basis.
Among the hedge funds tracked by Insider Monkey, 35 funds were bullish on PacWest Bancorp (NASDAQ:PACW) at the end of Q1 2022, up from 33 funds in the preceding quarter. Amy Minella’s Cardinal Capital is the largest shareholder of the company, with almost 4.5 million shares worth $193.5 million.
Here is what Palm Valley Capital Fund has to say about D.R. Horton, Inc. (NYSE:DHI) in its Q2 2022 investor letter:
“Vidler Water was acquired by homebuilder D.R. Horton (NYSE:DHI) during the second quarter for $15.75 per share, a modest 19% premium to the 90-day volume weighted average price. D.R. Horton can use Vidler’s water rights to satisfy government requirements to have water resources available before it breaks ground on new housing developments in Nevada. The takeover price was below our valuation, but D.R. Horton was the only real buyer who stepped up to the plate for Vidler’s assets. The deal appears to have leaked early, since the stock surged in the weeks before the announcement.”
2. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 52
D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that constructs residential homes in 31 states. The slowing demand for housing led D.R. Horton, Inc. (NYSE:DHI) to cut its guidance for its fiscal year ending September 30, 2022. The company now sees FY2022 consolidated revenue of $33.8 billion to $34.6 billion, below the $34.72 billion consensus and down from the $35.3 billion to $36.1 billion guidance it issued previously. Home closings are now predicted to be 83,000 to 85,000 units for the year, down from the 88,000 to 90,000 units the company priorly expected.
According to Insider Monkey’s data, 52 hedge funds were long D.R. Horton, Inc. (NYSE:DHI) at the end of Q1 2022, compared to 54 funds in the last quarter. John Armitage’s Egerton Capital Limited is the leading position holder in the company, with 7.8 million shares worth $582.5 million.
Here is what Palm Valley Capital Fund has to say about D.R. Horton, Inc. (NYSE:DHI) in its Q2 2022 investor letter:
“Vidler Water was acquired by homebuilder D.R. Horton (NYSE:DHI) during the second quarter for $15.75 per share, a modest 19% premium to the 90-day volume weighted average price. D.R. Horton can use Vidler’s water rights to satisfy government requirements to have water resources available before it breaks ground on new housing developments in Nevada. The takeover price was below our valuation, but D.R. Horton was the only real buyer who stepped up to the plate for Vidler’s assets. The deal appears to have leaked early, since the stock surged in the weeks before the announcement.”
1. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 56
Lockheed Martin Corporation (NYSE:LMT) is a Maryland-based security and aerospace company. On July 19, Lockheed Martin Corporation (NYSE:LMT) lowered its full-year guidance after the company failed to meet Q2 consensus estimates for earnings per share and revenue. The company cited F-35 fighter jet sales dropping in the midst of pandemic-driven headwinds as the reason for missing Q2 Street estimates. Lockheed Martin Corporation (NYSE:LMT) slashed FY 2022 EPS guidance to $21.55 from its earlier estimate of $26.70 and sales guidance to $65.25 billion from the last guidance of $66 billion.
Among the hedge funds tracked by Insider Monkey, Lockheed Martin Corporation (NYSE:LMT) was part of 56 public hedge fund portfolios at the end of March 2022, up from 42 funds in the previous quarter. Rajiv Jain’s GQG Partners is a significant position holder in the company, with 1.7 million shares worth $763.2 million.
Here is what Vltava Fund has to say about Lockheed Martin Corporation (NYSE:LMT) in its Q4 2021 investor letter:
“Of course, not all of our companies are doing better than we expected. Lockheed Martin fell somewhat short of our expectations last year. In the cases of Lockheed disruptions in the supply and logistics chains. Lockheed uses a great many subcontractors from various countries and could not avoid issues with continuity of supplies. As a result, production will be slightly lower than we had expected.”
You can also take a look at Analyst Are Cutting Estimates on These 10 Tech Stocks and 10 Hedge Funds That the Economic Recession is Crushing.
