Here are this week's downgrades to Strong Sell as determined by the POWR Ratings algorithm.
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Recent news on these stocks:
RBC Capital raised the firm's price target on GDS Holdings to $17 from $15 and keeps a Sector Perform rating on the shares. The company's Q4 results were "solid", and while its rating remains neutral, GDS's focus on bookings with shorter move-in rates may support a favorable set-up for 2024, the analyst tells investors in a research note. GDS has potential to outperform its peers in the long run given its positioning in an underpenetrated, growing market with strong customer demand trends and limited competitive supply, RBC Capital added.
Exane BNP Paribas initiated coverage of Toast with a Neutral rating and $16 price target.
Snap unveiled AR Enterprise Services, or ARES, a new enterprise solution to enable businesses to integrate Snap's Augmented Reality, or AR, into their owned and operated channels with ease and at scale. Through this offering, consumers will enjoy immersive and personalized experiences with their favorite brands, with a suite of advanced tools designed to increase confidence in their purchases. ARES' inaugural offering is for retail, and among the first group of customers are Goodr, Princess Polly, and Gobi Cashmere. Each of these companies have been using various products from Fit Finder to AR Try-On, which are features that make up our new Shopping Suite.
In response to a Biden administration demand that TikTok divest itself from parent ByteDance Ltd. or face a nationwide ban, China says it would strongly oppose any forced sale of the video app, The Wall Street Journal reported. A forced sale by Washington could damage the confidence of Chinese investors in the U.S. and said any sale or spinoff of TikTok would involve technology-export issues that would need to be handled according to Chinese law and with the approval of the Chinese government, China's Commerce Ministry says. Shu Yuting, a spokeswoman for the ministry. She said a forced sale would severely undermine global investors, "including Chinese investors" confidence in investing in the U.S. Other publicly traded companies in the social space include Meta Platforms (META), Pinterest (PINS), Snap (SNAP), Alphabet (GOOG, GOOGL) and Twitter (TWTR).
#SocialStocks: TikTok aims to ease advertisers amid heightened U.S. scrutiny - #SocialStocks is The Fly's weekly recap of Wall Street's reactions to social media stock news. To see the rest of the story, click here.
SoFi Technologies announced that its SoFi Checking and Savings members will be able to protect their deposits with access to up to $2M of FDIC insurance, increased from the industry standard $250,000 per account. SoFi Checking and Savings is able to offer additional FDIC insurance through the SoFi FDIC Insurance Network, a newly created partnership with multiple banks designed to provide the best benefits to SoFi members. "It's our goal to help people get their money right, which we know goes hand in hand with feeling good about the safety of their funds," said Anthony Noto, CEO of SoFi. "By offering access to up to $2 million in FDIC insurance, we are making sure our members have peace of mind about their money at SoFi. We know the last few weeks have been unnerving for many consumers, and we hope this helps. We will keep pushing ourselves to drive innovation to better meet our members' needs and ensure they have complete trust in us."
Capitalize announced a new partnership with Robinhood Markets. Capitalize's partnership with Robinhood Retirement will help customers find and roll over legacy 401(k) accounts into Robinhood's new individual retirement accounts. Additionally, Robinhood will be featured on Capitalize's leading IRA marketplace as a potential destination for users looking to consolidate their legacy 401(k) assets. "Since we launched Robinhood Retirement last year, we've seen close to half a million customers take advantage of our IRA, the only IRA in the market with a 1% annual match. This partnership will make it much simpler and easier for Americans to roll over their funds," said Steve Quirk, Chief Brokerage Officer of Robinhood. "To kick things off, we are giving folks an additional 1% on every dollar they transfer in from external retirement accounts until April 18."
BofA notes that an investment research company published a report with its short thesis on Sigma Lithium, in which the firm highlights risks around execution, expertise, stakeholder agreements and funding. However, the firm contends that many of the questions raised by this short seller can be viewed simply in the context that the lithium industry has moved from a period of market oversupply to undersupply and the report does not change the firm's view that Sigma has "one of the most desirable greenfield lithium projects on the market," along with one of the more qualified operating teams and an equity value that "leaves more room for appreciation." BofA reiterate its Buy rating and $45 price target on Sigma shares.
Barclays analyst Benjamin Budish lowered the firm's price target on Robinhood to $10 from $11 and keeps an Underweight rating on the shares. The analyst updated price targets in the brokers, asset managers and exchanges group following the collapse of SVB Financial and other recent events. The firm thinks near-term cash borrowing will weigh on fiscal 2023 and 2024 earnings and balance sheet growth for the sector.
Grizzly Research reported a short opinion on Sigma Lithium, a development-stage lithium mining company focused on advancing its Brazilian Mining project to production. According to the firm, "bogus" feasibility studies and production delays will leave "investors praying for a buyout." Grizzly Research believes a bid from Tesla (TSLA) is "unlikely" given CEO Elon Musk's focus on refining and preference for clay minerals available in Nevada over conventional spodumene, and while there may be suitors for Sigma, "not at the current price."
About "Sell these stocks now"
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.