BofA analysts double-downgraded shares of VIZIO Holding Corp. (NYSE:VZIO) to Underperform from Buy, with a price target of $6 per share, down from $11 in a note Thursday.
They told investors that the weak consumer spending backdrop poses headwinds for the company.
"We see headwinds from a weaker macro environment. The device (TV) side of the business will face challenges from a weaker consumer spending environment, and we cut our device estimates to reflect lower TV unit sales," they wrote.
"The Platform+ side of the business faces pressure from lower active accounts (function of TV sales) and a weaker advertising market," they added.
The analysts also pointed to the fact that the company's profitability ramp will be slower as device pricing continues to be aggressive and a recovery in the panel market creates some upside pressure on costs. As a result, BofA expects device margins to remain subdued.