5 big analyst cuts: First Republic stock slashed on 'unprecedented uncertainty' | Pro Recap

By Davit Kirakosyan

Investing.com -- Here is your daily Pro Recap of the biggest analyst cuts you may have missed on InvestingPro since yesterday. Start your free 7-day trial to get this news first.

First Republic Bank cut to Neutral due to 'unprecedented uncertainty'

Atlantic Equities downgraded First Republic Bank (NYSE:FRC) to Neutral from Overweight - and it is withdrawing its price target on the stock, as "the exceptionally high level of uncertainty makes providing forecasts challenging." The firm added that its adjusted EPS forecasts are declining by 95% in fiscal 2023 and by 94% next year, "even assuming costs decline by 9-12% over the next two years."

"Management is exploring different strategic options which may include a full sale or divestments of parts of the loan portfolio," the firm said. "The limited information provided implies that the balance sheet has increased substantially, which may well necessitate a capital raise."

Wedbush likewise downgraded the shares, although JPMorgan reiterated the stock as a Top Pick and its Overweight rating on First Republic, saying it sees "considerable" EPS upside after the largest U.S. banks - Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC), among others - committed $30 billion in uninsured deposits to boost First Republic's liquidity.

"We've covered the bank sector for over two decades and we have never seen the industry come together before to help secure a peer in need," the firm wrote in a note.

Shares were recently plunging about 25% to $25.53, punctuating a total slide of some 80% total over the past two weeks.

Esperion Therapeutics earns several downgrades, shares plunge 54% on DSE news

Esperion Therapeutics (NASDAQ:ESPR) was downgraded at Northland Capital Markets and BofA Securities after the company reported that Daiichi Sankyo Europe (DSE), its European partner, disagrees with its assessment that CLEAR Outcomes data would support milestone payments.

As a result, shares plunged more than 54% yesterday.

Northland Capital Markets downgraded the stock to Underperform from Market Perform and cut its price target to $1.00 from $5.00, while BofA Securities downgraded to Underperform from Neutral and cut its price target to $1.50 from $8.00.

Nike initiated with Sell rating ahead of the Q3 report

Redburn initiated coverage on Nike (NYSE:NKE) with a Sell rating and $100 price target ahead of the company's Q3 earnings report on March 21.

The firm said its below-consensus sales growth expectation in 2023-2027 hinges on a sharp inflection in Greater China given likely slower growth in North America and smaller incremental contribution from the shift to DTC. "On EBIT margin, we expect a build from 2023E, but to 14.5% in 2026E rather than consensus' 15.7%," added the firm.

2 more downgrades

SVB Leerink downgraded Halozyme Therapeutics (NASDAQ:HALO) to Market Perform from Outperform with a price target of $42.00.

Shares plunged more than 9% yesterday after the company provides an update on the Opposition Division of the European Patent Office's oral decision to revoke one of Janssen's co-formulation patents for DARZALEX® (daratumumab) SC.

Keefe, Bruyette & Woods downgraded Synchrony Financial (NYSE:SYF) to Market Perform from Outperform and cut its price target to $32.00 from $46.00.