Investment Analysts’ Downgrades for October, 23rd (ADTN, CACI, CENX, DOV, DST, EGO, EXAC, GPS, IFF, MSI)
ADTRAN (NASDAQ:ADTN) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “Shares of ADTRAN have outperformed the industry over the last six months. Ushering in further good news, the company reported better-than-expected earnings per share in the third quarter of 2017. The bottom line also increased on a year-over-year basis. Total revenues climbed 9.6% year over year on the back of strong growth displayed by the company's Network Solutions portfolio. ADTRAN’s efforts to reward shareholders also raise optimism in the stock. However, Research and development expenses and Selling, general and administrative expenses have increased in the third quarter. Continuous increase in costs is concerning and has the potential to hurt results in the near term.”
CACI International (NYSE:CACI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “CACI International intends to drive operational excellence by intensively focusing on its organic and inorganic growth strategy and strengthening its existing customer relationships while building newer ones. The company further anticipates to significantly benefit from its cost-reduction program and reiterated its earlier guidance for fiscal 2018 on healthy growth dynamics. The company has a large pipeline of new projects and continues to win more deals at regular intervals. However, macroeconomic challenges, foreign currency volatility and regulatory pressure remain potential headwinds. Federal government contracts are also subject to extensive legal and regulatory hurdles and subject to change from time to time. Deviations from the terms laid out by the government may further result in huge penalties or termination. The company has underperformed the industry year to date.”
Century Aluminum (NASDAQ:CENX) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Century Aluminum has outperformed the industry it belongs to over the past six months. The company is implementing a number of actions to reduce costs and preserve cash amid a weak operating environment. It should also gain from strong aluminum demand across automotive and aerospace markets in its key regions, North America and China, as well as acquisitions. However, high levels of production from China is still hurting the aluminum industry. The company also faces a difficult pricing environment and is seeing high costs for power and certain key raw materials.”
Dover Corporation (NYSE:DOV) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Dover’s third-quarter revenues and earnings improved on a year-over-year basis and beat the respective Zacks Consensus Estimate on the back of continued strength in its global markets. The quarter ended with robust bookings and backlog that bodes well for the fourth quarter. Dover guides 2017 adjusted EPS in the $4.23-$4.33 range, an increase of 38% year over year at the mid-point. The company’s planned separation of its Wellsite business and the sale of consumer and industrial winch business of Warn will help in streamlining portfolio. It will aid the company to invest in market-leading platforms with strong margin profiles. Dover will benefit from cost saving actions, significant drilling activity and fast-growing digital textile printing market. The stock has outperformed its industry year to date. However, continued softness in the commercial cooking equipment markets and increased raw material costs will impact results.”
DST Systems (NYSE:DST) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “DST Systems reported stellar third-quarter results. Further, revenues grew year over year, primarily due to BFDS and IFDS acquisitions. We believe that DST Systems’ business volume and massive scale of operation in Financial Services will attract new customers. Moreover, we expect steady contributions from acquisitions to support revenue growth. Continued share buybacks and dividend payments are the other encouraging factors. However, persistent decline in registered accounts, ongoing consolidation in the U.S. financial services market and stiff competition from International Business Machines Corporation and Fiserv Inc. might put its fundamentals under pressure. Moreover, a high debt burden remains a major concern. Notably, DST Systems has underperformed the industry in the last one year.”
Eldorado Gold Corporation (NYSE:EGO) (TSE:ELD) was downgraded by analysts at Credit Suisse Group from a neutral rating to an underperform rating.
Exactech (NASDAQ:EXAC) was downgraded by analysts at Sidoti from a buy rating to a neutral rating.
Exactech (NASDAQ:EXAC) was downgraded by analysts at Robert W. Baird from an outperform rating to a neutral rating. The firm currently has $42.00 target price on the stock.
Gap, Inc. (The) (NYSE:GPS) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Gap’s shares have outpaced the industry so far this year, driven by its solid focus on enhancing product quality and responsiveness to changing consumer trends. Evidently, the company has been making constant efforts to boost its digital and mobile offerings, alongside improving product acceptance. Further, the company’s new growth strategy focused on growing its Old Navy and Athleta brands looks promising. The company expects to open 270 new Old Navy and Athleta stores, while closing 200 Gap and Banana Republic stores. Additionally, Gap’s second-quarter fiscal 2017 marked its second straight earnings beat, and sales topped estimates for the fifth consecutive quarter. The company’s growth efforts and a solid first half encouraged management to raise fiscal 2017 earnings view. However, currency woes are likely to persist in fiscal 2017. It also expects high SG&A expenses in third quarter to impede results.”
International Flavors & Fragrances (NYSE:IFF) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “In the last year, International Flavors & Fragrances' shares have underperformed the industry. It also looks overvalued compared with the industry. The company's presence in international markets has exposed it to risks arising from foreign currency-translation and geopolitical issues. For 2017, it predicts a negative foreign currency impact of 1% on revenues and 2.5% on earnings per share growth. Also, the company is exposed to risks arising from uncertain global economic conditions and stiff competition. In the last 60 days, earnings estimates on the stock decreased for 2017.”
Motorola Solutions (NYSE:MSI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Shares of Motorola Solutions have outperformed its industry so far this year. We expect the company to deliver an impressive bottom-line performance in the third quarter, driven by its strong product portfolio. Detailed results should be out on Nov 2. In keeping with its growth-by-acquisition strategy, the company completed the acquisition of Kodiak Networks, earlier in 2017. The buyout has strengthened its software product portfolio. However, currency related headwinds might hurt the stock going forward. Though positive on Motorola's growth by acquisition strategy, we note that costs associated with the mergers are limiting bottom-line growth. The company's weak balance sheet is also concerning.”
NCR Corporation (NYSE:NCR) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “NCR is one of the world’s leading consumer transaction technology providers. The Zacks Consensus Estimate for the company moved down after it reported dismal top-line performance for the third quarter and lowered its outlook for the full year. The company’s third-quarter revenues were mainly impacted by weakness in the ATM business as large customers across North America, India, the Middle East and Africa delayed their spending. Additionally, a slow conversion to Windows 10 was the other primary reason behind the year-over-year decline in ATM business revenues. Considering the aforementioned factors to continue impacting its near-term results, NCR lowered its full-year revenues and earnings outlook. This makes us increasingly cautious about the company’s near-term prospects. The stock has underperformed the industry to which it belongs to in the year-to-date period.”
Noble Corporation (NYSE:NE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Noble Corporation’s robust portfolio of assets, long-term commitments and strong backlog offer some relief in the currently weak pricing scenario. What's more, Noble continues to benefit from its ability to land contract extensions even in a weak market. Moreover, the company’s continuous endeavors to upgrade its fleet will prove beneficial in the existing tough market conditions. However, the driller’s three-month pricing chart reveals Noble underperformed the drilling industry. The company’s high level of debt is another concern.”
National Oilwell Varco (NYSE:NOV) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Aggressive cost reduction and improved efficiencies helped National Oilwell Varco come out with narrower-than-expected fourth quarter loss. Importantly, NOV reported a sequential increase in sales as OPEC's production cut decision helped oil stabilize within a range above $50 per barrel. While maintaining its excellent track record of earnings surprise history of 3 beats in the last 4 quarters, NOV has outperformed the Zacks categorized 'Oil Field machineries & Equipment' industry during that period. However, the ongoing weakness in commodity prices – despite the recent OPEC-driven recovery – has curtailed energy drilling and equipment demand thereby affecting the company’s revenues, earnings and cash flow. Hence, while being incrementally positive on NOV, we expect the shares to remain soft until commodity prices recover sufficiently.”
Potash Corporation of Saskatchewan (NYSE:POT) (TSE:POT) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Potash Corp. has underperformed the industry it belongs to over the past three months. The company remains exposed to a weak pricing environment. Potash pricing remains under pressure due to elevated global inventories. The company also faces challenging agriculture market fundamentals and weakness across specific consumer markets. The company’s stretched valuation is another concern.”
Southern Copper Corporation (NYSE:SCCO) was downgraded by analysts at Scotiabank from a sector perform rating to an underperform rating.
SunTrust Banks (NYSE:STI) was downgraded by analysts at Raymond James Financial, Inc. from an outperform rating to a market perform rating.
TE Connectivity (NYSE:TEL) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Year to date, shares of TE Connectivity has underperformed the industry average. Sluggish industrial markets and derivative impact of lower oil prices are posing as major headwinds for the company, thwarting growth. The company is also experiencing inefficiencies in its supply chain as it is grappling to meet very high demand from customers. Moreover, the company expects to incur high restructuring charges going forward, which will push up costs and hurt margins in the near term. Further, adverse currency fluctuations and high restructuring expenses might hurt the company’s performance. However, strong progress on strategic priorities, solid execution and impressive top-line growth are proving conducive to the company’s profitability. It expects transportation business to experience high-single-digit organic growth, fueled by rise in global auto production and impressive heavy truck business in key end markets.”
Vale (NYSE:VALE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Over the last month, Vale’s shares have underperformed the industry. We believe further downside in iron-ore prices might hurt the company’s top- and bottom-line results in the quarters ahead. Moreover, headwinds such as stiff industry rivalry, sudden outbreak of any natural disaster or unfavorable government policies are expected to thwart near-term results. However, the company reported strong third-quarter 2017 production results. Vale is gradually bringing down its costs, by boosting productivity. In addition, Vale is deleveraging its balance sheet with the help of the company’s ongoing liability management program. Also, over the last 60 days, the Zacks Consensus Estimate for the stock moved north for both 2017 and 2018.”
Receive News & Ratings for ADTRAN Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for ADTRAN Inc and related companies with MarketBeat.com's FREE daily email newsletter.