4 big analyst cuts: Rivian trimmed on valuation and stepped-up competition
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Rivian Automotive, ZoomInfo, Crestwood Equity Partners, and Electronic Arts.
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Rivian downgraded ahead of Q2
Electric vehicle maker Rivian Automotive (NASDAQ:RIVN) saw shares fall more than 1% Tuesday, with a 4% premarket slump Wednesday, after Cantor Fitzgerald downgraded the company to a Neutral from Overweight with a price target of $29.00 (from $27.00).
The downgrade came on valuation - shares have rocketed nearly 50% year to date - as well as "increased competition" in the EV space from Tesla (NASDAQ:TSLA), General Motors (NYSE:GM), and Ford Motor (NYSE:F).
The company is set to report its Q2/23 earnings on Aug 8. Street estimates stand at ($1.43) for EPS and $1 billion for revenues.
ZoomInfo’s rating cut at two firms following Q2 miss
ZoomInfo Technologies (NASDAQ:ZI) was downgraded by two Wall Street firms after the company reported worse-than-expected Q2 revenue and guidance, which resulted in a share price drop of nearly 27% yesterday.
Deutsche Bank downgraded the company to Hold from Buy and cut its price target to $20.00 from $31.00.
The analyst said that, while there is a sense that the company may be nearing a bottom and the lowered 2023 guidance accounts for further deterioration, concerns remain about management's lack of visibility and the stock's multiple, which the analyst says carries downside risk.
Wolfe Research downgraded the company to Peerperform from Outperform.
After multiple cuts to guidance, and macro headwinds not dissipating for the foreseeable (at least three more quarters) future, we believe shares stay range-bound for as investors digest a HSD/LDD top line growth profile with contracting FCF margins that we don't see returning to 40% until after 2025.
Shares were down another 1.3% in premarket trading.
Crestwood Equity received two downgrades
Crestwood Equity Partners (NYSE:CEQP) was hit with two downgrades following the company’s reported Q2 results, highlighted by revenue and adjusted EBITDA miss. As a result, shares dropped more than 5% yesterday.
JPMorgan cut the company to Underweight from Neutral and cut its price target to $28.00 from $30.00.
Given the limited total return potential to our new PT and recent quarterly EBITDA misses, we see CEQP in the 'show me camp' for a period of time.
Meanwhile, RBC Capital lowered the stock to Sector Perform from Outperform and cut its price target to $27.00 from $29.00.
Electronic Arts cut to Neutral
UBS downgraded Electronic Arts (NASDAQ:EA) to Neutral from Buy with a price target of $142.00 (from $140.00) following Q1 results, as reported in real time on InvestingPro. As a result, shares dropped more than 4% premarket today.
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