Each week, The Fly will announce the newest downgrades to Strong Sell in StockNews.com's POWR Ratings algorithmic model.
This Fly exclusive recap identifies stocks with over a $1B market capitalization that have been downgraded this week to the Strong Sell, or "F," rating in the service's proprietary model that analyzes 118 different factors, each of which contribute a little to the stock's predicted likelihood of underperformance. A bell curve distribution of StockNews.com's ratings shows that only the top 5% of the over 5,000 stocks rated by the system are assigned a "Strong Buy," or "A," rating while the bottom 5% are assigned a Strong Sell. The F-rated stocks would have tumbled an average of 18.98% a year since 1999, according to StockNews.com.
This week's downgrades to Strong Sell as determined by the POWR Ratings algorithm:
The Fly's recent reporting on these stocks includes:
On June 30, RBC Capital analyst Joseph Spak reiterated an Outperform rating and $77 price target on Rivian Automotive, saying RBC Elements powered data gives him confidence in the company's Q2 delivery estimates. Spak said that, based on his RBC Elements powered normalized foot traffic data, he believes current production expectations for Q2 deliveries look "very reasonable," and that the current pace of production may be back near the highs. The analyst added that the most critical part of the near-term Rivian story depends on achieving their 2022 25,000 production target.
The same day, Truist analyst Andrew Jeffrey lowered the firm's price target on Block to $105 from $145 but keeps a Buy rating on the shares as part of a broader research note on IT Services. While he remains long-term bullish on leading Digital Native stocks and "safe haven" traditional networks, Legacy Processors offer the least attractive risk/rewards amid near-term margin risk and share challenges, the analyst told investors, adding that Block is still his "favorite large cap FinTech."
Meanwhile, JMP Securities analyst Andrew Boone lowered the firm's price target on Snap to $42 from $45 and keeps an Outperform rating on the shares as part of a broader research note on Internet & Digital Media. The analyst is citing the deteriorating macro backdrop of high inflation, ongoing supply chain issues, rising interest rates, and worsening business and consumer confidence. Boone expects the digital advertising growth to have slowed through Q2 and now projects 11% growth for global digital advertising in 2022 before a rebound arrives in 2023.
On June 29, Snap said it is launching Snapchat+, a collection of exclusive, experimental, and pre-release features available in Snapchat for $3.99/month. "This subscription will allow us to deliver new Snapchat features to some of the most passionate members of our community and allow us to provide prioritized support," the company said. "Snapchat+ will be available at launch in the United States, Canada, the United Kingdom, France, Germany, Australia, New Zealand, Saudi Arabia, and the United Arab Emirates. We'll expand to more countries over time. Just tap Snapchat+ on your Snapchat profile to get started."
In a regulatory filing, MicroStrategy disclosed that during the period between May 3 and June 28, MicroStrategy acquired approximately 480 bitcoins for approximately $10.0M in cash, at an average price of approximately $20,817 per bitcoin, inclusive of fees and expenses. As of June 28, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 129,699 bitcoins, which were acquired at an aggregate purchase price of approximately $3.98B and an average purchase price of approximately $30,664 per bitcoin, inclusive of fees and expenses.
Earlier this week, JPMorgan analyst Doug Anmuth lowered the firm's price target on Farfetch to $16 from $20 and kept an Overweight rating on the shares. The analyst reduced estimates and price targets on 26 companies across his interest coverage universe based on macro pressures, currency moves and company-specific dynamics. Anmuth also lowered the firm's price target on Snap to $24 from $26 and kept an Overweight rating on the shares.
On June 28, UBS analyst Kunal Madhukar downgraded Farfetch to Neutral from Buy with a price target of $10, down from $13. The analyst believes management's assumptions for gross merchandise volume growth in the Americas, Europe, Middle East, and Africa excluding Russia, and Asia-Pacific excluding China could still be optimistic especially if the macro outlook continues to worsen. He projects 1.7% year-over-year growth for 2022, below the Street at 4% growth. In addition to slower growth, upside in Farfetch shares is limited by a lack of visibility into its key drivers of value, Madhukar tells investors in a research note. The analyst thinks the stock will be range-bound, noting that Farfetch "remains a profitless-tech company in an environment where investors are acutely focused on profits."
On June 27, Mizuho analyst Vijay Rakesh lowered the firm's price target on Rivian Automotive to $70 from $80 and keeps a Buy rating on the shares. The analyst "conservatively lowered" June quarter and second half of 2022 unit delivery estimates to reflect Shanghai shutdowns and supply chain constraints. However, Rakesh sees strong electric vehicle demand despite higher prices, with longer lead times, as production and new models ramp. Despite elevated macro risks, battery electric vehicles could see strong second half of 2022 ramps as China reopens and demand improves, Rakesh tells investors in a research note.
The same day, Loop Capital analyst Anthony Chukumba lowered the firm's price target on Warby Parker to $15 from $18 and keeps a Hold rating on the shares. The analyst states that his proprietary eye exam availability tracker for Warby Parker that checks the number of appointments available across a sizeable percentage of the company's store base to gauge demand trends anticipates sequential decline in eye exam availability from Q1 to Q2, which is consistent with management's revenue guidance. Chukumba further cites rising inflation and plummeting consumer confidence while cutting his FY22 revenue view to $625.8M from $639.3M.
Nutex Health announced that it has been selected to join the Russell 2000 and Russell 3000 indexes after the 2022 Russell indexes annual reconstitution, effective after the U.S. market opens on June 27.