Alphabet hammered: 6 big analyst cuts
Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades for Alphabet, Albemarle , Corning, TransUnion , Affirm Holdings , and Farfetch.
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Alphabet downgraded, numbers slashed on disappointing Q3
After Alphabet's (NASDAQ:GOOGL) Q3 earnings release late Tuesday, the Google operator was taking a beating and lost its Buy rating at Monness, Crespi, Hardt and a number of Wall Street analysts trimmed their price targets on the stock.
GOOGL shares were recently tumbling more than 9%.
The search giant beat on top and bottom lines, but cloud revenue rose less than expected - it came to $8.4 billion, a 22% climb, vs. expectations for $8.6B - and operating income was also short of expectations at $21.34B. Overall earnings came to $1.55 per share, ahead of the $1.46 average target, and total revenue of $76.7B beat the $75.9B estimate.
Monness, Crespi, Hardt analysts called the operating profit result "disappointing" and characterized its earnings call as "opaque." They said they believe the company is well positioned across a number of dimensions, including AI innovations and its "leaner cost structure," but that "regulatory headwinds persist, competition is dynamic, and we believe the darkest days of this downturn are ahead of us."
Elsewhere, Citi highlighted the poor operating income result as well. Bernstein acknowledged the solid top line, but wrote, "margin contraction and a soft cloud print weighs heavily on the question 'why buy Google here?'
Bernstein trimmed the price target by $5 to $135 while keeping its Market Perform rating on the stock, and Stifel cut its own price target by $9 to $145 - although kept its Buy rating on GOOGL.
GOOGL shares were recently changing hands at $126.18.
Albemarle cut at {{0||Piper Sandler}} on macro worries
Chemical maker Albemarle (NYSE:ALB), the world's largest lithium producer, was losing ground after Piper Sandler cut its rating to Neutral from Overweight and dramatically cut its price target - to $155 from the prior $255 - , as reported in real-time on InvestingPro.
The downgrade is based on macro concerns: the overall long-term outlook for the industry and "challenges in [electric vehicle] manufacturing and demand, which may conspire to significantly degrade lithium’s S/D dynamics," wrote the analysts.
They added:
"We believe widespread downstream issues for the product owing to slowing EV demand growth driven by macroeconomic factors and product issues within the OEMs and a relatively faster rate of lithium supply growth will take the lithium market to a balanced to long situation vs. estimates of a decidedly short situation as recently as 6 months ago. As a result, lithium prices may remain under pressure and earnings growth may suffer."
Piper also downgraded lithium-focused peer Livent (NYSE:LTHM) to Neutral from Overweight in that same note, with its price target sharply reduced to $19 (from the prior $33).
Albemarle shares were falling 3.6% to $134.20 soon after market open. Livent was down 2.1% to $15.57.
Corning slashed at Deutsche Bank after Q3 miss
Deutsche Bank downgraded Corning (NYSE:GLW) to Hold from Buy and cut its price target to $30.00 from $37.00. This decision followed Corning's missed Q3 earnings and a Q4 outlook that didn't match the consensus.
Deutsche analysts cited significant risks to forward estimates after disappointing results from the specialty glass and ceramics purveyor, and cut the company's core EPS projections for 2024 and 2025 by 18%.
The analysts also wrote that demand seems weak across Corning's key end markets, and that an upward trend might not be seen until the latter half of 2024. Deutsche’s current predictions suggest a decline in year-over-year core revenue growth through H2/24, including a 10% reduction in Q4/23 and a 6-7% decrease in H1/24.
Shares were off marginally to $26.84 soon after market open.
TransUnion hit with two downgrades following weak Q3
TransUnion (NYSE:TRU) was cut by two Wall Street firms on Tuesday after the company missed its Q3 earnings and provided a disappointing outlook. Following the result, the company’s shares plunged more than 23% yesterday, and were recently down another 3.5% to $48.08.
BofA Securities downgraded the stock by two notches - to Underperform from Buy - and cut its price target to $44.00 from $95.00. The decision stems from the anticipated continued decline in consumer lending, expected to last until mid/late-2024. Additionally, after TransUnion's substantial 28% reduction in its Q4/23 EPS guidance, BofA says trust has been shaken in management's visibility. The combination of ongoing macroeconomic challenges and the company's relatively high leverage further dampens sentiment, wrote the analysts.
Meanwhile, Evercore ISI downgraded the company, as well - to In Line from Outperform - with a price target of $82.00 (from $95.00).
Two more downgrades
Affirm Holdings (NASDAQ:AFRM) shares were plunging some 9% to $17.79 soon after market open after Compass Point downgraded the company to Sell from Neutral with a price target of $13.00.
Societe Generale downgraded Farfetch (NYSE:FTCH) to Sell from Buy with a price target of $1.50. Shares were lately trading down 7.5% o $1.72.
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