4 big analyst cuts: VMware trimmed as Broadcom buyout enters home stretch
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at VMware, Celanese, Upwork, and Farfetch.
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VMware cut to Neutral as Broadcom takeout wraps up
Monness, Crespi, Hardt downgraded VMware (NYSE:VMW) to Neutral from Buy ahead of the company’s Q2/24 earnings on Thursday.
The firm highlighted VMware's stock performance during the 2022 tech decline and its continued growth this year, citing "a modest valuation for a software stock, a unique value proposition in the cloud, an attractive margin profile," and support from the pending deal with Broadcom (NASDAQ:AVGO).
But "given that the acquisition by Broadcom appears to be in the home stretch," said the firm, it is now moving to the sidelines on the stock.
Shares were marginally higher in premarket trading at $165.50.
Celanese falls on Piper Sandler downgrade
Celanese (NYSE:CE) shares fell nearly 2% premarket today after Piper Sandler downgraded the company to Underweight from Neutral and cut its price target to $112.00 from $120.00, as reported in real time on InvestingPro.
Earlier this month, the company reported its Q2 results, with EPS and revenues coming in worse than the consensus estimates. Furthermore, Q3/23 and full-year EPS guidance missed the expectations.
Two more downgrades
Upwork (NASDAQ:UPWK) shares dropped more than 4% yesterday after BTIG downgraded the company to Neutral from Buy, noting it believes the valuation is now more balanced following around 40% year-to-date gain in the stock price.
While there are arguments for why we think UPWK should enjoy a premium valuation such as its number one position in the space and longer runway for take-rate expansion, we believe UPWK's valuation adequately reflects those positives and risk-reward is now balanced.
Morgan Stanley downgraded Farfetch (NYSE:FTCH) to Equalweight from Overweight and cut its price target to $5.00 from $20.00. Shares fell more than 1% premarket today.
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