'Little recourse but to downgrade' Frontier Air, says Citi: 4 big analyst cuts
Investing.com -- Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Brighthouse Financial, Frontier, nCino, and Ventas.
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Frontier slashed to Neutral at Citi
Frontier (NASDAQ:ULCC) shares were sliding Thursday after Citi downgraded the budget airline to Neutral from Buy and cut its price target to $5.50 from $16.00, as reported in real-time on InvestingPro.
"We had expected Frontier’s seat mile cost profile to have provided some operational support, relative to some other domestic discount carriers,” wrote Citi. While the analysts say this proved partially true, they also noted that they had underestimated the significance of this seat mile cost cushion.
Frontier's recent remarks about experiencing more pronounced seasonal weakness, moreover, align with data indicating a downturn in December travel bookings year-over-year. The analysts wrote:
"Although the weak share price performance somewhat shields Frontier from a more bearish view, management’s demand comments, along with weak December booking curve data, now seem to leave little recourse but to downgrade Frontier from Buy to Neutral and add a High Risk rating on increased earnings and share price volatility."
Shares opened the market at $4.58, down 4.6% from the prior close.
Brighthouse Financial cut at Goldman Sachs
Goldman Sachs slashed insurer Brighthouse Financial (NASDAQ:BHF) to Sell from Neutral on Thursday, trimming its price target by $4 to $43.
The analysts wrote that the downgrade came after Brighthouse's "disclosure of multi-year cash flow which we think suggests a slower ramp-up of free cash flow than we had anticipated (detailed within)."
They added that they believe the firm's projections "indicate a greater growth rate on cash flow is unlikely before years 2029-2033."
Goldman also sees 16.4% downside to its new $43 price target on the firm.
Shares were off 5.3% to $48.55 soon after the open.
nCino drops following Morgan Stanley downgrade
Morgan Stanley downgraded nCino (NASDAQ:NCNO) from Equalweight to Underweight on Wednesday with a price target of $24.00.
The analysts noted that the company's fiscal 2025 estimates are at risk as they look too high when accounting for the recent bookings performance. They also said the company is facing bookings performance and potential revenue headwinds from recent bank closures. They added:
Despite recent bookings challenges, NCNO continues to trade at a premium to peers on a growth-adjusted basis, even on numbers that we believe aren't appropriately accounting for the RPO to revenue delta that we unpack in this note.
Shares lost 3.1% Wednesday and were slipping at the open Thursday as well.
Ventas trimmed at Raymond James
Raymond James downgraded Ventas (NYSE:VTR) to Outperform from Strong Buy and cut its price target to $53.00 from $55.00.
The analysts wrote that they no longer consider Ventas their Top Large Cap Healthcare REIT Pick - and that they are replacing it with Welltower (NYSE:WELL) instead due to the company's "operational strength and unparalleled access to and cost of capital."
The analysts added, "The recession-resilient and defensive, needs-driven nature of healthcare is increasingly top of mind for investors in the current uncertain economic environment. We expect several names in our healthcare REIT coverage will continue to capture some of the incremental dollars looking for safety and, we believe, offer compelling risk/rewards."
Ventas shares were down marginally to $43.68. Welltower was also off fractionally at $84.70.
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