In this article, we will take a look at the 10 stocks receiving downgrades from analysts. If you want to see some more companies receiving ratings-cut, go directly to Wall Street Analysts are Downgrading These 5 Stocks.
Analysts continue to update their ratings for stocks in the current volatile market, citing various factors such as financial performance and changing macroeconomic conditions. Snowflake Inc. (NYSE:SNOW), Comcast Corporation (NASDAQ:CMCSA) and Dollar General Corporation (NYSE:DG) were among the notable stocks that recently received downgrades from market research firms.
In addition, Wall Street analysts also lowered their ratings for Southwest Airlines Co. (NYSE:LUV) and Avalara, Inc. (NYSE:AVLR). Check out the complete article below to see the reasons behind these downgrades.
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10. Rackspace Technology, Inc. (NASDAQ:RXT)
Number of Hedge Fund Holders: 16
Shares of Rackspace Technology, Inc. (NASDAQ:RXT) fell nearly three percent on Tuesday, August 16, 2022, after JPMorgan downgraded the Texas-based cloud computing company from “Neutral” to “Underweight.”
JPMorgan analyst Tien-tsin Huang expressed concerns over the company’s earnings growth potential in the near term. Huang also cut his price target for Rackspace Technology, Inc. (NASDAQ:RXT) from $7 per share to $5 per share.
The downgrade came just a few days after Rackspace Technology, Inc. (NASDAQ:RXT) announced disappointing results for the second quarter. Last week, Rackspace reported adjusted earnings of 17 cents per share for Q2, down from 24 cents per share in the year-ago period. Revenue for the quarter increased 4 percent on a year-over-year basis to $772 million, missing the consensus of $793 million.
9. Clean Energy Fuels Corp. (NASDAQ:CLNE)
Number of Hedge Fund Holders: 18
Raymond James lowered its ratings for Clean Energy Fuels Corp. (NASDAQ:CLNE) from “Outperform” to “Market Perform,” sending its shares down nearly four percent on Tuesday, August 16, 2022.
Clean Energy Fuels Corp. (NASDAQ:CLNE) shares have gained decent value on a year-to-date basis and Raymond James analyst Pavel Molchanov thinks that stock’s current valuation is close to fair value. Molchanov also referred to the recently approved Inflation Reduction Act and how clean tech companies like Clean Energy Fuels Corp. (NASDAQ:CLNE) could benefit from it.
The Inflation Reduction Act includes $369 billion in funds for climate change and clean energy measures. The legislation offers a range of incentives and tax credits for firms working in areas like clean energy.
8. TaskUs, Inc. (NASDAQ:TASK)
Number of Hedge Fund Holders: 21
TaskUs, Inc. (NASDAQ:TASK) received a downgrade from Morgan Stanley on Monday, August 15, 2022. The research firm lowered its ratings for the digital outsourcing services provider from “Overweight” to “Equal Weight.”
Morgan Stanley analyst James Faucette was moved by the near-term growth challenges that would likely make the stock range bound in the coming quarters. Faucette also cut his price target for TaskUs, Inc. (NASDAQ:TASK) from $28 per share to $19 per share.
Shares of TaskUs, Inc. (NASDAQ:TASK) have traded mostly lower since announcing a disappointing sales outlook for fiscal 2022 last week. The company expects full-year revenue between $930 – $950 million, below analysts’ average estimate of $992.41 million.
7. Park Hotels & Resorts Inc. (NYSE:PK)
Number of Hedge Fund Holders: 22
Park Hotels & Resorts Inc. (NYSE:PK) is a real estate investment trust (REIT) that owns several famous hotels and resorts in the U.S. BMO Capital downgraded the Virginia-based lodging REIT from “Outperform” to “Market Perform” on Tuesday, August 16, 2022.
BMO Capital analyst Ari Klein thinks the company’s big-box properties in urban gateway markets could face uncertainty. Klein trimmed his price target for Park Hotels & Resorts Inc. (NYSE:PK) from $21 per share to $18 per share.
Like Park Hotels & Resorts Inc. (NYSE:PK), analysts also lowered their ratings for Snowflake Inc. (NYSE:SNOW), Comcast Corporation (NASDAQ:CMCSA) and Dollar General Corporation (NYSE:DG).
6. Elanco Animal Health Incorporated (NYSE:ELAN)
Number of Hedge Fund Holders: 31
Shares of Elanco Animal Health Incorporated (NYSE:ELAN) slightly moved down on Tuesday, August 16, 2022, following a downgrade from JPMorgan. The research firm decreased its ratings for the animal health company from “Overweight” to “Neutral.”
JPMorgan analyst Chris Schott expressed concerns over the company’s outlook for the current and next year amid supply chain issues and product delays. Schott also cut his price target for Elanco Animal Health Incorporated (NYSE:ELAN) from $28 per share to $24 per share.
The downgrade came a week after Elanco Animal Health Incorporated (NYSE:ELAN) trimmed its financial outlook for fiscal 2022. The company now anticipates adjusted earnings in the range of $1.06 – $1.13 per share and revenue between $4.46 – $4.55 billion for the full year. The revised guidance missed the consensus of $1.14 per share for earnings and $4.69 billion for revenue.
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Disclosure: None. Wall Street Analysts are Downgrading These 10 Stocks is originally published on Insider Monkey.
