Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Weibo, Lyft , EPAM Systems, and Albemarle.
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Weibo double downgraded at BofA Securities
Weibo (NASDAQ:WB) shares fell nearly 2% pre-market today after BofA Securities downgraded the company to Underperform from Buy and cut its price target to $10.00 from $20.00, as reported in real-time on InvestingPro.
The analysts pointed out that compared to major advertising platforms, Weibo might be more susceptible to macroeconomic and competitive challenges. A significant portion of Weibo's advertising revenue comes from consumption-related sectors, particularly Fast-Moving Consumer Goods (FMCG), with a focus on brand promotion. There is an expectation that spending on brand promotion advertising will continue to be weak in 2024 due to broader economic factors and a shift by advertisers toward performance-based advertising.
Additionally, the analysts raised concerns about competition from short video platforms and other social channels, which could impact Weibo's traffic and advertising revenue.
Other potential risk factors include content risks, particularly the impact of the new real-name display policy for influencers with over 500,000 followers, uncertainties related to Alibaba’s shareholding in Weibo given recent news of Alibaba’s stake sales in other investments, and Weibo's position in the generative AI race, where it lags behind peers with deeper financial resources and stronger AI capabilities.
Lyft cut to Neutral at Goldman Sachs
Goldman Sachs downgraded LYFT (NASDAQ:LYFT) to Neutral from Buy with a price target of $15.00 (from $12.00). As a result, shares fell more than 1% pre-market today.
The analysts explained that this downgrade is due to a more balanced risk-reward outlook following a significant increase, nearly 35%, in Lyft's share price since the company's Q3/23 earnings results were announced in early November.
Despite the downgrade, the analysts maintain a positive outlook on Lyft's operational trajectory. They believe that Lyft's revenue growth could pick up pace, increasing from an estimated 7% year-over-year growth in 2023 to about 15% in 2024. This anticipated growth is partly attributed to Lyft beginning to overcome the challenges posed by the lower consumer prices it introduced 12 months ago, with Q2/23 expected to fully reflect the impact of these measures. The analysts anticipate that starting in Q2/24, Lyft will have more favorable year-over-year revenue comparisons, supported by a continued solid double-digit growth in underlying ride volumes throughout 2024.
Two more downgrades
EPAM Systems (NYSE:EPAM) shares fell nearly 2% pre-market today after Jefferies downgraded the company to Hold from Buy with a price target of $295.00.
Deutsche Bank downgraded Albemarle (NYSE:ALB) to Hold from Buy and cut its price target to $135.00 from $155.00.
We believe a more cautious view over the near-to-medium term is prudent given the uncertainty and volatility in lithium prices. While most lithium producers are expecting a rebound in Q2 (post Chinese Lunar New Year), further details into the magnitude of the rebound remain meager, at best.
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