Analysts Are Turning Bearish on These Stocks

Chris Dios - October 3, 2019

NEW YORK, Oct. 3, 2019 /TheStockDork/ — Yesterday was a bad day for the stock market. All of the major indices lost over 1.5% of their value before the session closed.

The sell-off affected most of the market, but many of those stocks were simply following the market. The real question is, which stocks are going to continue to go down?

Wall Street analysts downgraded these stocks yesterday, indicating that sentiment is shifting towards bearish on these companies.

If you own any of these companies, you’re officially on notice. These analysts expect these stocks will underperform the market. Here are yesterday’s most notable downgrades:

Yesterday’s Biggest Downgrades

Activision-Blizzard (ATVI)

Downgraded from ‘Market Perform’ to ‘Underperform’

Bernstein analyst Todd Jeunger downgraded ATVI to underperform yesterday, citing concerns about the companies product pipeline and slowing earnings. He said there is ‘too much hope’ surrounding Activision’s stability and thinks there is more trouble ahead for the company.

ATVI closed yesterday’s session down 1.23%.

TD Ameritrade Holding Corp. (AMTD)

Downgraded from ‘Overweight’ to ‘Underweight

TD Ameritrade announced yesterday that it would join Schwab in eliminating its trade commissions. TD draws a larger portion of its revenues from its trade fees than its competitors, so the decision is expected to pressure margins and earnings. Barclays gave TD Ameritrade a double-downgrade to ‘underweight’ after the news broke.

AMTD closed yesterday’s session down 3.26%

Charles Schwab (SCHW) and E*Trade Financial (ETFC).

The major brokers are all expected to face earnings pressure as a result of the move towards zero commissions. Barclays issued issued double-downgrades on both of these major brokers.

SCHW closed the day down 3.31%; ETFC was down 3.59%

Downgraded to ‘Neutral’

Analysts expect these equities to perform inline with the overall market.

Louisiana-Pacific Corp. (LPX)

Downgraded from ‘Buy’ to ‘Neutral’

Longbow downgraded Louisiana-Pacific Corp. from ‘buy’ to ‘neutral’. The company produces construction materials for residential and light industrial use. The downgrade likely reflects softening sentiment relating to the manufacturing sector resulting from Tuesday’s weak ISM manufacturing data.

LPX closed yesterday’s session down 1.63%.

Monster Beverage Corp. (MNST)

Downgraded from ‘Buy’ to ‘Neutral

Guggenheim downgraded Monster Beverage to neutral on fears of increasing competition from Coca-Cola’s new energy drink. Coca Cola’s energy drink is performing well and it could eat into Monster’s revenues. Zack’s Investment Research also downgraded Monster, but it took Monster from ‘hold’ to ‘sell’, indicating a more bearish outlook than Guggenheim’s call.

MNST closed yesterday’s session down 2.30%

First Republic Bank (FRC)

Downgraded from ‘Outperform’ to ‘Market Perform
Wells Fargo analyst Jared Shaw changed his rating on FRC to ‘market perform’. He cited a ‘challenging’ interest rate environment and an elevated valuation as the primary reasons for the downgrade. Shaw lowered his price target on FRC down to $100 from $112. Analysts see limited opportunity for gains given the banks lofty valuation of 19 times forward earnings.
FRC closed yesterday’s session down 3.10%

Canadian Natural Resources Ltd. (CNQ)

Downgraded from ‘Outperform’ to ‘Sector Perform

National Bank Financial lowered its rating on CNQ to sector perform. The downgrade likely stemmed from ongoing developments in Canadian Natural Resources ongoing lawsuit against Enbridge (ENBA) over ‘perceived abuses of market power’. CNQ is challenging Enbridge’s construction of its Mainline pipeline system.

CNQ closed yesterday’s session down 2.21%

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Chris Dios is an American writer and entrepreneur based in the Greater NYC area.

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