By Davit Kirakosyan
Investing.com — Here is your daily Pro Recap of the biggest analyst rating changes you may have missed on InvestingPro this morning. Start your free 7-day trial to get this news first.
Tesla downgraded to Peer Perform on growing macro concerns
Wolfe Research downgraded Tesla (NASDAQ:TSLA) to Peer Perform from Outperform. While the firm remains positive on Tesla’s long-term opportunity and “impressive cost trajectory,” it is growing increasingly concerned about macro challenges facing the EV maker.
Tesla has had to lower prices more than expected, and there are macro challenges that could hurt EV makers even more. For example, the Tech Sector is still struggling, and the recent implosion of SVB Financial (NASDAQ:SIVB) could make things worse, according to the firm.
California is a big market for EVs (41% for Tesla) and tech (roughly 20% of California’s economy), and if tech spending slows down more, the firm believes there could be more layoffs.
Charles Schwab upgraded to Buy at Citi
Citi upgraded Charles Schwab (NYSE:SCHW) to Buy from Neutral while cutting its price target to $75.00 from $83.00 due to a compelling risk/reward at current levels after a 23% decline over the last two trading days.
Although there may be some short-term revenue/earnings headwinds from rising funding costs and continued client cash sorting, the firm believes they are already reflected in the stock price. The firm doesn’t see a significant risk of deposits leaving Charles Schwab due to the composition of its deposit base and customer protections.
“Tapping supplemental fundings (FHLB, CDs, etc.) will present a near-term earnings headwind, but we expect these to be temporary measures and for the company to swap out these funding sources via organic sources ASAP,” added the firm.
Shares are down more than 3% pre-market today.
3 more rating changes
JPMorgan downgraded Under Armour (NYSE:UA) (NYSE:UAA) to Neutral from Overweight and cut its price target to $10.00 from $13.00.
“Larger picture, management is now citing Summer to Fall ’23 at the earliest for the “inventory overhang” to be worked through, which has created an elevated promotional environment across the sector “longer than expected” for UAA,” said the firm.
Under Armour expects its 2023 gross margin to decline by approximately 425bps year-over-year, with around 140bps of pressure from higher promotions and discounting. This is due to Under Armour managing its own inventory and discounting more than expected to stay competitive in a sector with bloated inventory levels.
UBS downgraded United Natural Foods (NYSE:UNFI) to Neutral from Buy and cut its price target to $32.00 from $48.00.
The company reported a Q2 EPS miss and lowered its full-year guidance last week. This resulted in a stock price drop of 28% on Wednesday.
Shares are up 3% pre-market today.
Wells Fargo upgraded JPMorgan (NYSE:JPM) to Overweight from Equal Weight and raised its price target to $155.00 from $148.00.