Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Apple, EPAM Systems, and AMC Networks; and initiation at Cloudflare.
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Apple downgraded to Neutral
DA Davidson downgraded Apple (NASDAQ:AAPL) to Neutral from Buy and cut its price target to $185.00 from $193.00, reflecting an increase in its discount rate (with the 10-Year Treasury Yield at 3.7%) offsetting the modest increase in its near-term sales and profit outlook from the new product launch.
Yesterday, the company unveiled the Vision Pro, a high-priced headset that challenges Meta Platforms' (NASDAQ:META) dominance. Priced at $3,499, over three times the cost of Meta's (NASDAQ:META) high-end offerings, the Vision Pro potentially represents Apple's riskiest move since the iPhone's debut. Apple says the spatial computer seamlessly merges digital content with the real world.
EPAM receives several downgrades on a surprise guidance cut
EPAM Systems (NYSE:EPAM) was downgraded at several Wall Street firms after the company lowered its Q2/23 and full-year guidance yesterday due to further deterioration in the near-term demand environment, which resulted in a share price drop of more than 21%.
Q2 revenues are now expected to be in the range of $1.1 billion-$1.17 billion (2.5% year-over-year decrease at the midpoint), while full-year revenues are now seen at $4.65B-$4.80B (2% year-over-year decrease at the midpoint).
Citi downgraded the company to Neutral from Buy with a price target of $220.00 (from $310.00), Barclays downgraded to Equalweight from Overweight with a price target of $220.00 (from $310.00), KeyBanc downgraded to Sector Weight from Overweight, Piper Sandler downgraded to Neutral from Overweight with a price target of $215.00, and BofA Securities downgraded to Underperform from Buy with a price target of $223.00 (from $310.00).
Cloudflare initiated at Sell as shares are pricing in too much AI benefit
UBS initiated coverage on Cloudflare (NYSE:NET) with a Sell rating and a price target of $55.00, as InvestingPro reported in real time.
The company’s shares surged recently due to enthusiasm over the potential benefits from artificial intelligence, but UBS cautions that current expectations may not align with near-term opportunities. While Cloudflare's distributed edge has long-term potential in the GenAI ecosystem, UBS believes short-term prospects are being conflated with the opportunities of companies more directly tied to centralized compute.
AMC Networks downgraded at Morgan Stanley
Morgan Stanley downgraded AMC Networks (NASDAQ:AMCX) to Underweight from Equalweight and cut its price target to $12.00 from $19.00
According to the firm, AMC Networks is focused on managing the business to optimize for stabilizing FCF by reducing costs, but pressures on the core linear business (e.g. cord-cutting, advertising headwinds) remain, and streaming growth has slowed.
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