Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Peloton Interactive, Dick's Sporting Goods, Analog Devices, and Estée Lauder.
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Peloton Interactive receives two downgrades following disappointing Q4
Peloton Interactive (NASDAQ:PTON) received two downgrades after reporting a Q4 EPS miss and smaller-than-expected revenue guidance, as well as issuing a cash flow warning. As a result, shares plunged more than 22% yesterday.
BofA Securities downgraded the company to Neutral from Buy and cut its price target to $6.50 from $13.00 on limited visibility on growth initiatives. “We expect app users, FaaS growth, partnerships, Intl marketing to drive gross adds, but higher churn will limit net sub growth,” mentioned BofA.
Meanwhile, Needham downgraded the company to Hold from Buy given medium-term trends and the macro environment.
Dick's Sporting Goods cut at two firms after Q2 miss & guidance cut
Two Wall Street firms downgraded Dick’s Sporting Goods (NYSE:DKS) after the company posted a Q2 miss, cut its full-year guidance, and announced plans for business optimization, as reported in real time on InvestingPro. As a result, shares plummeted more than 24% on Tuesday.
Wedbush downgraded the company to Neutral from Outperform with a price target of $115.00. Although the company’s valuation is low relative to historical levels, Wedbush mentioned that more limited visibility to the sales outlook and bottom for margins has led them to cut estimates and reduce the rating on the stock.
Meanwhile, BofA Securities downgraded the company to Neutral from Buy and cut its price target to $125.00 from $180.00. The bank’s rating change decision is driven by heightened risks to the company's sales and margin outlook post-Q2 results. These risks stem from factors including the normalization of spending in categories that performed well during the COVID-19 period, increased grocery inflation affecting discretionary purchases, and the re-opening of alternative discretionary spending opportunities (travel, entertainment).
Two more downgrades
Piper Sandler downgraded Analog Devices (NASDAQ:ADI) to Neutral from Overweight with a price target of $190.00 after the company reported weaker-than-expected results for Q3 and provided an outlook for Q4 that trailed analyst estimates.
While the company is doing almost everything right in terms of reducing excess inventory, we simply are not comfortable with the timeframe of the economic downturn. Given ~50% exposure to the industrial segment for ADI, we feel the company's prospects are likely to be caught up in the economic slowdown, and as such, we are choosing to move to the sidelines.
Bernstein downgraded Estée Lauder (NYSE:EL) to Market Perform from Outperform and cut its price target to $160.00 from $230.00. Shares fell more than 1% premarket today.
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