Dollar General slashed at JPMorgan amid 'clouding' uncertainty: 4 big analyst cuts
Investing.com -- Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Dollar General, Chewy, Phillips Edison, and Skyworks Solutions.
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Dollar General falls on JPMorgan downgrade
Dollar General (NYSE:DG) shares fell nearly 2% premarket Wednesday after JPMorgan downgraded the company to Underweight from Neutral and cut its price target to $116.00 from $132.00, as reported in real time on InvestingPro.
The analysts cut the discount retail chain after a concerning presentation by management, which they say included CFO Kelly Dilts citing "continued uncertainty clouding the FY24 picture today with first half macro headwinds sequentially worsening for DG’s low to middle income consumer by our work (lapping excess savings w/ incremental govt assistance cuts)."
They added that the company's core low-end consumer is already under significant financial stress due to a combination of factors, including the depletion of pandemic-related savings, persistent inflation, and reductions in government assistance. And they say that management expects middle-income customers will face more financial challenges ahead, with looming student loan repayments, higher interest rates, and rising fuel prices.
Volatility is also expected to pick up in the second half of FY24 around the upcoming US presidential election, says JPMorgan.
Shares were changing hands at $112.90 about two hours before the opening bell.
Chewy slashed to Perform at Oppenheimer
Chewy (NYSE:CHWY) lost ground premarket Wednesday after Oppenheimer downgraded the stock to Perform from Outperform.
The analysts wrote:
We expect a more challenging backdrop to persist for at least a few more quarters, amid recent signs of weakness in the historically resilient pet food category and the potential for more muted inflation benefits in FY24 (Jan. 2025).
They also pointed out that the current higher interest rate environment adds further pressure to the company's shares.
Despite these near-term concerns, the firm still holds a favorable view of Chewy's long-term potential. However, it says it is waiting for clear signs of improvement in customer additions and a potential adjustment of consensus estimates by analysts.
Shares were recently down 1.7% in the premarket to $19.13.
Two more downgrades
Wells Fargo downgraded Phillips Edison (NASDAQ:PECO) to Underweight from Equal Weight with a price target of $35.00. Shares were lately down 1% premarket.
Skyworks Solutions (NASDAQ:SWKS) shares were also off about 1% premarket today after Exane BNP Paribas downgraded the company to Neutral from Outperform.
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