By Davit Kirakosyan
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Zions Bancorp, Valley National, Macy's, Wolfspeed, and Tractor Supply.
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Zions Bancorp slashed at Morgan Stanley
Zions Bancorp (NASDAQ:ZION) share fell more than 1% pre-market today after Morgan Stanley downgraded the company to Underweight from Equalweight with a price target of $32.00 (from $27.00).
The firm's decision is based on several factors. Zions’ recent strong rally, up over 70% since May lows, has brought its valuation in line with industry peers, ending a period of consistent discount trading throughout 2023.
“We believe this skews risk-reward to the downside in a higher for longer rate environment given the elevated risk of NIB outflow which would need to be replaced with higher cost client deposits currently off-balance sheet,” mentioned Morgan Stanley.
Valley National cut to Underweight
Morgan Stanley downgraded Valley National Bancorp (NASDAQ:VLY) to Underweight from Equalweight with a price target of $8.50 (from $8.00), as reported in real-time on InvestingPro.
We think Consensus is underestimating the pressure on Valley's NII in a higher for longer rate environment. VLY has a 101% loan-to-deposit ratio (vs. ~84% for peers) which gives them less flexibility on deposit pricing in a higher for longer rate environment.
Three more downgrades
Gordon Haskett downgraded Macy’s (NYSE:M) to Hold from Buy and cut its price target to $13.00 from $18.00.
CFRA downgraded Wolfspeed (NYSE:WOLF) to Hold from Buy and cut its price target to $42.00 from $51.00.
Gordon Haskett downgraded Tractor Supply (NASDAQ:TSCO) to Accumulate from Buy with a price target of $215.00. As a result, shares fell nearly 1% pre-market today.
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