Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Bilibili, Carvana, Estée Lauder, and Kodiak Sciences.
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Carvana cut to Underweight at Morgan Stanley
Morgan Stanley downgraded Carvana (NYSE:CVNA) late Wednesday to Underweight from Equalweight with a price target of $35.00 (from $12.00), as reported in real time on InvestingPro.
Morgan Stanley (NYSE:MS) says it has significantly adjusted its model based on Carvana's stronger-than-expected Q2 earnings reported last week, outlook, and actions taken by the company to enhance its capital structure, and is downgrading primarily based on valuation:
We think much of the rally is deserved but the stock has run well above our increased target driving a less favorable risk-reward vs. our coverage.
After the downgrade, shares took a quick 3% fall in after-hours trading Wednesday, but were recently up fractionally in Thursday's premarket.
Bilibili falls on JPMorgan downgrade
Bilibili (NASDAQ:BILI) shares fell more than 2% premarket today after JPMorgan downgraded the company to Underweight from Overweight and cut its price target to $13.00 from $27.00.
While the bank acknowledges Bilibili's strong user engagement among China's Generation Z users, they become increasingly cautious about the company's monetization outlook. As a result, the firm adjusted its revenue estimates for 2023 and 2024, which now stand 8% and 11% below the consensus estimates.
Our key concerns: 1) we believe competition in China’s mobile game market has intensified since 2Q23, and thus the hit-and-miss risk for new mobile games (especially Pretty Derby) has increased; 2) we have become more cautious on the live streaming revenue (booked in VAS) outlook in 2023 due to higher regulatory risk (JPMe 2023 VAS revenue is 8% below consensus).
2 more downgrades
Estée Lauder (NYSE:EL) received its sixth downgrade in two months as Jefferies moved to the sidelines. The firm cut its rating to Hold from Buy with a price target of $190.00 (from $270.00).
UBS downgraded Kodiak Sciences (NASDAQ:KOD) to Neutral from Buy and cut its price target to $4.00 from $15.00. This represents the fifth downgrade this month.
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