5 big analyst cuts: J.M. Smucker deal 'introduces execution risk'; Ibex plummets

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By Davit Kirakosyan

Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Frontier, IBEX, O-I Glass, and EQT.

InvestingPro subscribers got this news first. Never miss another market-moving headline.

BofA cuts J.M. Smucker to Neutral

BofA moved to the sidelines on J.M. Smucker (NYSE:SJM) on Thursday, downgrading it to Neutral from Buy and dropping the price target to $145 from $170.

Analysts told investors that the downgrade was prompted by the company's proposed $5.6 billion acquisition of Hostess Brands (NASDAQ:TWNK), commenting:

"Our prior Buy rating was based on the view that SJM would focus on a more optimized portfolio of core brands, following several years of divestitures of low growth/margin assets. In our view, TWNK would add complexity to SJM’s story and introduces execution risk for a company with mixed M&A history."

Shares were recently down 1% to $127.14.

IBEX tumbles on Q4 miss; RBC Capital slashes shares to Sector Perform

RBC Capital downgraded IBEX (NASDAQ:IBEX) overnight to Sector Perform from Outperform and cut its price target to $18 from $27, as reported in real time on InvestingPro.

The downgrade follows a Q4 miss for the customer experience outsourcer. Analysts say the rating change came "given the ongoing industry pressures on the name" and said they were also lowering estimates on the name.

RBC Capital added that they "would consider becoming more constructive should revenue growth reaccelerate."

Ibex shares were in free fall Thursday, down some 25% to $13.49 in recent trading.

Frontier downgraded at TD Cowen following guidance update

TD Cowen downgraded Frontier Group (NASDAQ:ULCC) to Market Perform from Outperform on Wednesday and cut its price target to $8 from $12 following a guidance update from management.

The updated guidance indicates an unexpected dip in booking trends, deviations from usual sales patterns, impacts from higher fuel costs, Tropical Storm Hilary and Hurricane Idalia, and overall operational challenges.

Shares dropped more than 9% Wednesday, and were recently ticking up fractionally to $5.60.

Another pair of downgrades

O-I Glass (NYSE:OI) shares fell more than 2% Wednesday after Credit Suisse downgraded the company to Neutral from Outperform with a price target of $22 (from $21).

The analysts noted that consumers have been changing their buying patterns due to price pressures, a trend seen in various packaging substrates.

They added that, although the glass industry remained largely unaffected until recently because of factors like capacity limitations and robust demand in spirits and wine, they are concerned about future volume pressures on premium substrates like glass.

Scotiabank downgraded EQT (NYSE:EQT) to Sector Perform from Sector Outperform on Wednesday with a price target of $52.

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