Texas Instruments margins in for a squeeze; Silk Road walloped: 5 big analyst cuts
Investing.com -- Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Texas Instruments, Silk Road Medical, HubSpot, 89bio, and Arista Networks.
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Texas Instruments loses Outperform rating at Oppenheimer
Texas Instruments (NASDAQ:TXN) was cut to Perform from Outperform at Oppenheimer on Wednesday ahead of the company's Q3 earnings next week, as reported in real-time on InvestingPro.
The analysts, who also removed the chipmaker's prior $195 price target, foresee near-to-medium-term "sustained margin pressure as [management] invests in capacity" despite a "proven and respected" management team with a 10-year strategic vision and favorable macro factors.
Oppenheimer also believes gross margins will be "pressured for next few [years]" thanks to "under-utilization, increased depreciation," and aggressive pricing in power management integrated circuits (PMIC) in China - the latter of which the analysts note constitute about 20% of Texas Instruments sales.
The analysts added, "In our view, TI's battle of attrition w/smaller suppliers in China could persist for the foreseeable."
They also expect in-line figures for Texas Instruments' Q3 print and Q4 guidance.
Share were down 0.7% to $156.62 in recent trading.
Silk Road Medical downgraded at 3 firms
Silk Road Medical (NASDAQ:SILK) was in free fall on Wednesday, sliding more than 50% in recent trading, after the company was hit with three downgrades amid a whirlwind of sour news: Q3 preliminary revenue miss, reduced full-year guidance, and word of CEO Erica Rogers (NYSE:ROG)' retirement.
Citi in particular downgraded the stroke prevention outfit by two notches, to Sell from Buy, and lopped off almost 80% of its price target - to $8.00 from the prior $35.00. The analysts said that, despite their belief in the company's Transcarotid Artery Revascularization Procedure (TCAR) for coronary artery disease (CAD) care, the impending departure of the CEO and soft outlook are now significant concerns.
The analysts wrote, "there is little visibility into the business presently and we see limited room for stock appreciation and expect investors may capitulate after a difficult year for SILK."
Meanwhile, B.Riley and Stifel both downgraded the company to neutral ratings, slashing its price target to $14 and $12, respectively, from the prior $54 and $45.
Shares were lately down 51% to $6.86.
89bio slashed at Oppenheimer
Oppenheimer downgraded 89bio (NASDAQ:ETNB) to Perform from Outperform without a price target after Tuesday's disappointing trial data from a peer developing a similar therapy to a crucial one in 89bio's pipeline.
Akero Therapeutics' (NASDAQ:AKRO) midstage trial of nonalcoholic steatohepatitis (NASH) therapy to treat fatty liver disease - which is similar to one 89bio is currently developing - missed its main goal.
Oppenheimer said it now has "reduced confidence" in that approach to treat stage F4 NASH-associated fibrosis, as it sees "negative read-across from AKRO's Ph2b SYMMETRY topline data for EFX in F4 NASH patients."
89bio shares, which tumbled 37% lower on that news Tuesday, was off another 14% to $8.40 in recent trading.
HubSpot, Arista knocked a notch lower
HubSpot (NYSE:HUBS) shares were falling 3.2% to $452.94 Wednesday after Raymond James cut the company to Outperform from Strong Buy and cut its price target to $520 from $600.
Piper Sandler cut Arista Networks (NYSE:ANET) to Neutral from Overweight on concerns about Arista’s networking spend in 2024. Shares were recently falling 3.3% to 188.24.
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