5 big analyst cuts: BofA sees 'increased risks' for Dick's Sporting Goods
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Premier, Workday, Genpact, and Genprex.
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Dick's Sporting Goods cut to Neutral at BofA
BofA analysts slashed retail chain Dick's Sporting Goods (NYSE:DKS) to Neutral from Buy on Thursday with a price target of $125, down from the prior $180.
The analysts wrote that, following its recent Q2 print, they see heightened risks to the company's sales and margin outlook due to - among other things - unfavorable post-COVID spending normalization on such things as outdoor apparel and bicycles, as well as the macro trends of (a) reduced discretionary spending due to outsize food inflation and (b) discretionary spending being pulled into rejuvenated industries like travel.
BofA also believes the retailer's gross margins could be pressured in the second half as a result of "further inventory actions in seasonal and other product," and says investments in "wages, advertising, technology and store growth" could lead to "magnified expense deleverage."
Dick's shares were falling 2.8% to $108.38 in recent trading Wednesday.
Premier downgraded at Piper Sandler following Q4
Piper Sandler downgraded Premier (NASDAQ:PINC) to Neutral from Overweight and cut its price target to $25.00 from $44.00 following Q4 results, which resulted in a share price drop of more than 3% yesterday.
Q4 EPS came in at $0.68, better than the consensus of $0.66, while revenue of $340.36 million missed the consensus estimate of $356.34M.
According to Piper Sandler, their optimistic predictions, reflected in the Overweight rating, have not materialized. They had expected the SCS segment to show positive comps by the second half of 2023. Their projections included the anticipation of renegotiated and renewed GPO contracts providing extended visibility of 5-7 years, and they foresaw steady growth in SCS revenue as purchasing regained strength within GPO contracts and utilization normalized.
"This thesis has not played out. Intra-contract share-back rate revisions will obscure visibility, undermine growth and increase risk; we fear these types of concessions are a slippery slope."
Workday downgraded ahead of Q2
OTR Global downgraded Workday (NASDAQ:WDAY) to Mixed from Positive, as reported in real time on InvestingPro.
The company is set to report its Q2/24 earnings tomorrow after the market close. Street estimates stand at $1.26 for EPS and $1.77 billion for revenues.
Two more downgrades
JPMorgan downgraded Genpact (NYSE:G) to Underweight from Neutral with a price target of $40.00.
Dawson James downgraded Genprex (NASDAQ:GNPX) to Neutral from Buy.
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