Netshoes downgraded to Underweight from Overweight at JPMorgan. JPMorgan analyst Andre Baggio double downgraded Netshoes to Underweight from Overweight without a price target. Since its initial public offering, the company has "disappointed on multiple fronts," leading to declining sales growth and risks to getting to profitability, Baggio tells investors in a research note. He believes "continuous cash burn" should further stretch Netshoes' balance sheet.
Netshoes valuation overly discounts downside risks, says Goldman Sachs. Goldman analyst Irma Sgarz said Netshoes shares are down 26% since the mixed Q3 report and down 53% in the last three months on concerns regarding increasing competitive threats ans B2B execution missteps. Sgarz lowered Buy rated Netshoes estimates and cut her price target to $10 from $20 but said valuation overly discounts downside risks and sees the company becoming EBITDA positive in 2018.
After Brazilian newspaper Valor Economico reported Amazon (AMZN) may make its long-awaited launch into the Brazilian e-commerce market within the week, shares of MercadoLibre (MELI) are sliding in early trading. Goldman Sachs analyst Irma Sgarz said a successful launch by the e-commerce giant could negatively impact the market share and gross merchandise volume growth of incumbents, such as MercadoLibre, while also forcing them to invest more heavily in free shipping and seller services. MercadoLibre has significant GMV exposure to electronics and Netshoes (NETS) could also be exposed if Amazon enters the markets of apparel and sporting goods, added Sgarz. PRICE ACTION: In morning trading, MercadoLibre shares are down over 6% to $256.94 while Netshoes is down more than 2% to $12.57.
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Illinois Tool Works (ITW) downgraded to Underweight from Neutral at JPMorgan with analyst Ann Duignan citing valuation and expectations for continued multiple compression on weaker than peer organic growth. The analyst lowered her price target for the shares to $132 from $141. 2. Boston Properties (BXP) downgraded to Outperform from Top Pick at RBC Capital with analyst Michael Carroll saying he thinks that upcoming move-outs by the REIT's tenants, along with slower than expected macro economic growth, will negatively impact its growth. 3. Sanderson Farms (SAFM) downgraded to Equal Weight from Overweight at Stephens with analyst Farha Asiam citing valuation. 4. Nucor (NUE) downgraded to Sector Weight from Overweight at KeyBanc with analyst Philip Gibbs citing spread and volume pressures. 5. Netshoes (NETS) downgraded to Hold from Buy at Jefferies with analyst Brian Fitzgerald citing continuing softness in the consumption environment in Brazil as well as limited visibility into near-term operating results. The analyst lowered his price target for the shares to $18.50 from $22. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
Netshoes downgraded to Hold from Buy at Jefferies. Jefferies analyst Brian Fitzgerald downgraded Netshoes to Hold citing continuing softness in the consumption environment in Brazil as well as limited visibility into near-term operating results. The analyst lowered his price target for the shares to $18.50 from $22.