Investment Analysts’ Downgrades for September, 21st (AAL, ABB, BCS, CTSH, FOXA, GE, ISLE, MIRN, NVS, QCOM)
American Airlines Group (NASDAQ:AAL) was downgraded by analysts at Raymond James Financial Inc. from an outperform rating to a market perform rating.
ABB (NYSE:ABB) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “ABB has a decent earnings history, with three beats and one miss in the four trailing quarters. ABB is one of the best managed industrial infrastructure, power and automation companies in the world that stands to benefit from investments made in the upgrade of power infrastructure. ABB’s proven “Next Level Strategy” and focused investments in three strategic areas are expected to propel growth. Going forward, the company’s operations in utilities, industry, and transport & infrastructure markets are anticipated to drive growth. However, on the flip side, volatility in the oil & gas industry and currency fluctuations are expected to pose as major headwinds, marring the company’s prospects. This apart, escalating geopolitical tension triggered by the Brexit referendum and weakness in key end markets are expected to play spoilsport. Also, poor sales and higher restructuring costs are adding to the problems.”
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Barclays PLC (NYSE:BCS) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “Barclays' sustained progress in lowering expenses will lead to enhanced profitability over time. Further, the company remains on track to achieve targeted cost savings this year and has been divesting non-core operations world-wide. Moreover, balance sheet restructuring will support financials in the long run. However, the company's muted revenue growth remains a major concern. Also, the Brexit storm is likely to have an unprecedented adverse effect on its financials in the quarters ahead. Further, the company's profitability is being affected by legal woes and a stringent regulatory landscape.”
Cognizant Technology Solutions Corp. (NASDAQ:CTSH) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Cognizant has been seeing downward estimate revisions of late. The company's business has been affected because of persisting macroeconomic headwinds and sluggish spending levels in its healthcare and financial sector, which are its biggest markets. The company had even lowered its revenue outlook for 2016 given these factors. Intense competition in the IT service industry, rising wages and customer concentration are other challenges. Nonetheless, the company is expected to benefit from strong demand for high quality, lower cost technology services. In addition, it has placed itself well to benefit from the ongoing digitization of businesses. Also, acquisitions will continue to play an important role in boosting revenues. “
Twenty-First Century Fox (NASDAQ:FOXA) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Increase in programming costs and fluctuation in foreign currency exchange rate continues to act as a headwind for Twenty-First Century Fox. In the fourth-quarter of fiscal 2016, the company expenses rose 15% primarily due to hiked sports programming costs owing to soccer rights costs at FNG International as well as Major League Baseball and streaming rights costs at the RSNs. The company expects costs at Cable Network to go up in fiscal 2017. Increase in expenses may dent the company’s margins and in turn the bottom line in the coming quarters. On the brighter side, Twenty-First Century Fox’s Cable Network Programming has been driving the company’s performance owing to rising affiliate fees. The company said that the pace of affiliate fees will accelerate in the back half of the fiscal year as 15%–20% of the company’s domestic subscribers will be up for annual renewal in the couple of years.”
General Electric (NYSE:GE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “General Electric is actively restructuring its portfolio by divesting most of the GE Capital assets in order to redefine itself as a core industrial entity with digital edge as exemplified by Meridium deal. The strategic acquisitions in 3D printing business will further boost its existing material science and additive manufacturing capabilities as it expects to grow the new additive business to $1 billion by 2020 at attractive returns. The company has a positive earnings history in the trailing four quarters, beating estimates thrice. Earnings estimates have also remained steady in the last week. However, despite prudent steps to limit financial exposure, it is still susceptible to various market risks following the Brexit referendum. In addition, decline in oil prices have significantly impacted profitability and have undermined its growth potential to some extent. Significant order backlog and foreign currency volatility remain other headwinds.”
Isle of Capri Casinos (NASDAQ:ISLE) was downgraded by analysts at Macquarie from an outperform rating to a neutral rating.
Mirna Therapeutics (NASDAQ:MIRN) was downgraded by analysts at Oppenheimer Holdings Inc. from an outperform rating to a market perform rating.
Novartis AG (NYSE:NVS) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Novartis is facing challenging business conditions due to generic competition and weakness in the Alcon business. Generic competition for Gleevec, Exelon Patch, Diovan and Exforge; increased spending related to the ongoing launches of Entresto and Cosentyx; the restructuring plan for Alcon; and unfavorable currency fluctuations will continue to dampen the company’s performance in the upcoming quarters. Nevertheless, the company enjoys a strong presence in the oncology market with drugs like Afinitor, Exjade, Jakavi and Zykadia. We are also impressed by the company’s efforts to strengthen its biosimilars portfolio.”
Qualcomm (NASDAQ:QCOM) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Qualcomm, undisputed leader of the global wireless baseband chipset market, is expected to gain significantly in China in the near term through signing of new patent license agreements with Chinese smartphone makers. The company is actively involved in the production of chipsets for the 5G standard and is sharing partnership with U.S. telecom behemoths like Verizon and Ericsson for the same, which may propel growth in future. Moreover, Qualcomm is widening its presence in adjacent opportunities, including automotive, networking, mobile computing, and IoT and these strategies bode well for long-term growth. However, regulatory proceedings against Qualcomm are a major headwind. Also, the company is suffering from increased competition from MediaTek and Intel and has projected a soft revenue outlook for 2016.”
Starbucks Corp. (NASDAQ:SBUX) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Starbucks sales fell slightly short of expectations in the last two quarters. Again, Starbucks cut its full year sales and comps outlook at the third quarter conference call. However, the third quarter headwinds were typically temporary and Starbucks expects U.S. comps to improve in the next quarter. Starbucks’s operating fundamentals remain strong – solid global retail footprint, successful innovations, best-in-class loyalty program and digital offerings as well as rapid growth in the international markets. Again, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships, food/beverage innovation, Starbucks Reserve premium coffees and Teavana tea can stimulate stronger sales trends in the Americas. CPG growth across the world as well as China/Asia expansion will also enhance value creation. However, accelerated global employee and digital investments can keep profits under strain for some time.”
Tobira Therapeutics (NASDAQ:TBRA) was downgraded by analysts at Cantor Fitzgerald from a buy rating to a hold rating.
Unit Corp. (NYSE:UNT) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “UNIT CORP. is engaged in the land contract drilling of oil and natural gas wells, the development, acquisition and production of oil and natural gas properties, and the marketing of natural gas. Its principal areas of operations are located in the Anadarko and Arkoma Basins, which cover portions of Oklahoma, Texas, Kansas and Arkansas and has additional producing properties located in other states, including but not limited to, New Mexico, Louisiana, North Dakota, Colorado, Wyoming, Montana, Alabama and Mississippi. “
VOLVO AB UNSP ADR EACH REP 1 (NASDAQ:VLVLY) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Volvo AB is a manufacturer of trucks, buses, construction equipment and marine and industrial engines. It also develops, manufactures and markets equipment for construction and related industries, including wheel and backhoe loaders, hydraulic wheeled and crawler excavators, articulated and rigid haulers, compactors, pavers, pipe layers, road machinery under the brand names of Volvo, SDLG and Terex Trucks. The Company offers repair and maintenance, lease financing, insurance and financial services. It operates primarily in Europe, North America, South America, Asia, and internationally. Volvo AB is headquartered in Gothenburg, Sweden. “
VMware (NYSE:VMW) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “VMware provides virtualization solutions from the desktop to the data center. Their solutions enable organizations to aggregate multiple servers, storage infrastructure and networks together into shared pools of capacity that can be allocated dynamically, securely and reliably to applications as needed, increasing hardware utilization and reducing spending. They have expanded their offering with virtual infrastructure automation and management products to address distributed and heterogeneous infrastructure challenges such as system recoverability and reliability, backup and recovery, resource provisioning and management, capacity and performance management and desktop security. They derive a significant majority of their revenues from their indirect sales channel that include distributors, resellers, x86 system vendors and systems integrators. “
Viper Energy Partners (NASDAQ:VNOM) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Viper Energy Partners LP is engaged in owning, acquiring and exploiting oil and natural gas properties primarily in North America. It focuses on developing mineral interests in the Permian Basin in West Texas. Viper Energy Partners LP is based in Midland, Texas. “
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