Analyst Downgrades: 4 Stocks to Avoid

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Why Pfizer, Walt Disney, Delek Logistics, and Inter are Facing Analyst Downgrades


The stock market is constantly changing, and sometimes analysts revise their ratings on certain stocks based on new information or expectations. In this blog post, we will look at four big analyst downgrades that happened recently and what they mean for investors.

Pfizer: Neutral from Outperform

Pfizer (NYSE:PFE) is one of the leading pharmaceutical companies in the world, and it has been in the spotlight for its COVID-19 vaccine. However, Credit Suisse downgraded Pfizer to Neutral from Outperform and lowered its price target to $40.00 from $47.00, citing limited pipeline catalysts and uncertainty.

The firm said that Pfizer’s recent updates on its oncology and rare disease programs were disappointing and that its growth prospects beyond 2022 are unclear. Credit Suisse also reduced its earnings estimates for Pfizer, reflecting lower revenue assumptions and higher expenses.

Pfizer’s stock has been trading sideways for most of the year, and it may face more pressure as the vaccine demand slows down and competition intensifies. Investors may want to wait for more clarity on Pfizer’s long-term strategy and pipeline potential before buying the stock.

Walt Disney: Sector Weight from Overweight

Walt Disney (NYSE:DIS) is one of the most iconic entertainment companies in the world, and it has been adapting to the changing consumer preferences by investing in its direct-to-consumer (DTC) streaming services. However, KeyBanc downgraded Walt Disney to Sector Weight from Overweight, arguing that the stock is facing multiple headwinds and uncertainties.

The firm said that Walt Disney’s domestic parks business may not recover as fast as expected, due to the ongoing pandemic and labor shortages. It also said that Walt Disney’s DTC subscriber growth has stalled, and that it may not be able to differentiate itself from other streaming platforms in terms of content quality and churn rate.

Moreover, KeyBanc pointed out that Walt Disney’s ESPN business is facing significant challenges in transitioning to streaming, as consumers are not willing to pay a high price for sports content. It also said that Walt Disney’s content sales segment is likely to lose money for the foreseeable future, as the traditional distribution channels are disrupted by streaming.

Walt Disney’s stock has been underperforming the market this year, and it may not see much upside until it can prove its ability to grow its DTC business and monetize its content assets. Investors may want to be cautious about Walt Disney’s valuation and growth prospects.

Delek Logistics Partners: Sell from Neutral

Delek Logistics Partners (NYSE:DKL) is a master limited partnership (MLP) that owns and operates midstream assets, such as pipelines, terminals, storage tanks, and trucks. It is affiliated with Delek US Holdings (NYSE:DK), a diversified energy company. However, Citi downgraded Delek Logistics Partners to Sell from Neutral and set its price target at $47.00.

The firm said that Delek Logistics Partners’ distribution coverage ratio is low compared to its peers, and that it may not be able to sustain its current payout level. It also said that Delek Logistics Partners’ growth opportunities are limited, as it depends on Delek US Holdings for dropdown transactions and organic projects.

Delek Logistics Partners’ stock has been lagging behind other MLPs this year, and it may not offer much value or income for investors. Investors may want to look for other MLPs with stronger fundamentals and growth prospects.

Inter: Neutral from Overweight

Inter (NASDAQ:INMD) is a medical device company that specializes in minimally invasive aesthetic treatments, such as radiofrequency-based skin tightening and fat reduction. It has been growing rapidly in recent years, driven by strong demand for its products and services. However, JPMorgan downgraded Inter to Neutral from Overweight, citing valuation concerns.

The firm said that Inter’s stock price already reflects its impressive growth potential and competitive advantages and that there is limited upside potential from current levels. It also said that Inter faces some risks, such as regulatory uncertainties, competitive pressures, and macroeconomic headwinds.

Inter’s stock has been soaring this year, reaching new highs almost every month. However, it may not be able to sustain its momentum as the market expectations become too high and the competition intensifies. Investors may want to take some profits off the table and wait for a better entry point.

Disclaimer: This blog post is for informational purposes only and does not constitute investment advice. You should do your own research before making any investment decisions. We are not responsible for any losses or damages arising from your use of this blog post or any of the information contained herein.



Key Word : analyst downgrades, stock market, Pfizer, Walt Disney, Delek Logistics Partners, Inter, valuation, growth, uncertainty, catalysts


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