Lucid cut to Hold, Foot Locker slashed at Citi before earnings: 4 big analyst cuts
Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed today: downgrades at Lucid, Foot Locker , Old Dominion Freight Line, and Southern Copper.
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Lucid downgraded at Needham
Lucid Group (NASDAQ:LCID) shares fell more than 1% pre-market today after Needham downgraded the company to Hold from Buy, as reported in real-time on InvestingPro.
The analysts explained the downgrade is due to revised unit estimates in their model following Lucid's third-quarter results and commentary. Additionally, after a more thorough examination of Lucid's partnership agreement with Aston Martin, the analysts adopted a more cautious stance regarding Lucid's potential to license its industry-leading EV efficiency technology.
Foot Locker drops following Citi’s downgrade
Foot Locker (NYSE:FL) shares fell more than 3% pre-market today after Citi downgraded the company to Sell from Neutral with a price target of $18.00, ahead of the upcoming Q3/24 earnings, scheduled to be released on Wednesday.
The analysts expect Q3 EPS of $0.10, which is below the consensus of $0.23. This projection is based on weaker-than-expected comparable sales (estimated at -11% versus the consensus of -10%) and a greater decline in gross margin (anticipated at -510 basis points compared to the consensus of -460 basis points).
The analyst suggests that challenging macroeconomic conditions and still high inventory levels are leading Foot Locker to increase promotions this fall and holiday season. They also predict a Q4 EPS of $0.16, below the consensus of $0.33, due to weaker sales and margins. “We believe FL will sacrifice margin near-term to get clean on inventory by year-end. With ~64% of sales coming from NKE product, FL is not completely in control of its own destiny. As we look to F24, a complex macro backdrop makes it tough to execute a turnaround,” commented Citi.
Two more downgrades
Deutsche Bank downgraded Old Dominion Freight Line (NASDAQ:ODFL) to Hold from Buy and cut its price target to $386.00 from $475.00. As a result, shares fell more than 1% pre-market today.
The analysts acknowledge the company’s impressive track record but cite the 30% increase in share price since their late April upgrade as a reason for adopting a more cautious stance. While Old Dominion has historically excelled at gaining market share in an improving freight environment, the analysts believe the company will face challenges in the next upturn as the rest of the industry continues to pivot towards a more service-centric model.
“To be sure, ODFL's service is still leaps and bounds ahead of the competition, but the gap is narrowing, which may have negative implications for market share cycle over cycle,” commented the analysts.
Southern Copper (NYSE:SCCO) shares fell more than 2% pre-market today after Morgan Stanley downgraded the company to Underweight from Equalweight and cut its price target to $68.00 from $83.00, due to lower expected production volumes and higher forecasted cash costs.
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