Equity researchers have the tendency to move markets, especially when they have credibility and markets remain on tenuous footing. Ahead of earnings season, the market is particularly keen to any insight that may provide forewarning to firm results.
Today, Goldman Sachs (NYSE: GS) downgraded the shares of Blackrock (NYSE: BLK) from buy to neutral, following a valuation review. Shares of Blackrock fell nearly a half a percent in responses, as investors digested this information. Goldman noted that the stock prices has approached the firm’s target of $180 per share, which likely triggered the changed in rating.
Bank of America (NYSE: BAC) downgrades Convanta shares from neutral to underperform. The key motivator in this change was concern that low natural gas prices are not sustainable. The firm expects margins on electricity to shrink again, but maintains its price target of $17.50.
In a similar report, Barclays (NYSE: BCS) downgraded the shares of consumer goods and soap magnate Colgate-Palmolive (NYSE: CL) from equal weight to underweight, as competition in the industry has heated up, forcing profit margins to shrink in the process. Concurrent to this action, Barclays slashed the target price from $80 per share to just $68. Colgate-Palmolive shares fell 2.1% following this report.
As earnings season is coming up quickly, investors will be paying renewed retention to analyst estimates and their suggestions. The movements made today may be a harbinger for the coming weeks.
