By Davit Kerakossian
Today, several brokerages have downgraded the shares of three big names, including NCR Corp. (NYSE :), Tronox (NYSE :), and Adobe (NASDAQ :). Below, we’ve provided the details for each downgrade:
Morgan Stanley cut NCR Corp’s rating to Equalweight from Overweight and lowered its target price to $27.00 from $38.00. Analysts expect the shares to be range-bound in the near term until there is greater clarity on key details of the recently announced deal, under which the company plans to split into two new independent publicly traded companies. While the analysts acknowledge the long-term potential of unlocking value, they believe it pays to be patient for investors, given the lack of historical performance before the turnover date (which is roughly 15 months) when risks are high.
BMO Capital downgraded Tronox to Market Performance from Outperform and lowered its target price to $16.00 from $21.00. As the company’s geographic footprint is weighted to Europe/Asia Pacific, analysts believe it faces a tough outlook as TiO2 prices are expected to decline due to lower demand and improved supply chains. Moreover, analysts believe that the company will face challenges from rising energy costs in the near term. As such, the company is not expected to outpace the broader group until there is significant relief in European energy prices.
Wells Fargo lowered Adobe’s rating to Equal Weight from Overweight and lowered the price target to $310.00 from $425.00, highlighting a streak of disappointing earnings results and announcing the acquisition of Figma for approximately $20 billion. While the product/strategic fit is clearly in line, analysts believe that price is likely to lend credibility to the bear’s case, at least for now. With the deal not expected to close until 2023, analysts expect concerns to persist and the company’s shares will remain range-bound.