4 big analyst cuts: Citizens Financial slashed on capital, profitability concerns
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Citizens Financial, Core Laboratories, Concentrix, and Sonder.
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Citizens Financial slashed to Neutral at JPMorgan
JPMorgan downgraded Citizens Financial (NYSE:CFG) to Neutral from Overweight and cut its price target to $27.00 from $29.00, citing concerns about the bank's capital requirements and profitability levels.
The recent 2023 DFAST results showed that all banks in JPMorgan’s coverage had capital in excess of minimum requirements, but Citizens is expected to face increased capital requirements, leading to pressure on profitability.
According to the firm, Citizens has a lower cushion relative to peers above minimum CET1 requirements based on 3/31 levels and has continued to buy back stock in Q2. The bank also faces challenges from high losses on commercial real estate (CRE) loans due to the high level of maturities of office CRE loans in 2023 and 2024.
Core Laboratories downgraded to Sell at Citi
Core Laboratories (NYSE:CLB) shares fell more than 1% pre-market today after Citi downgraded the company to Sell from Neutral and cut its price target to $21.00 from $22.00, as reported in real time on InvestingPro.
The bank cut its Q2/23 EBITDA forecast by approximately 5% to $18.9 million, around 6% below the Street estimate, on NAM completion weakness negatively impacting Production Enhancement.
Shares are up approximately 20% YTD and have outperformed its SMID OFS peers materially, but Citi believes this run likely ends soon given negative revisions.
2 more downgrades
BofA Securities downgraded Concentrix (NASDAQ:CNXC) to Neutral from Buy and cut its price target to $95.00 from $165.00. The company reported its Q2 results earlier this week, with EPS and revenues coming in worse than the consensus estimates.
JMP Securities downgraded Sonder (NASDAQ:SOND) to Market Perform from Market Outperform.
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