By Davit Kirakosyan
Pfizer (NYSE:PFE) shares closed more than 3% lower today after Wells Fargo downgraded the company to Equal Weight from Overweight and cut its price target to $50.00 from $54.00 as it believes an earnings down-revision cycle is coming for the company in the near term, coupled with margin pressure on the core business due to increased investments in new launches. The firm believes that Pfizer “needs a COVID reset before the stock could work again”. It also sees the company as having an attractive profile long term as it aims to achieve a 6% or higher CAGR revenue by 2025-2030, and is taking steps towards achieving this goal with pipeline and M&A. However, the firm believes it may take time for investors to appreciate this given future M&A is an important component.
Guggenheim downgraded Microsoft (NASDAQ:MSFT) to Sell from Neutral with a price target of $212.00. Although the firm doesn’t necessarily expect the company to miss numbers, it mentioned that they may disappoint investors nevertheless for both Q2/23 and guidance for the year. “While most investors see MSFT as a large stable business that can weather any storm, it does have vulnerabilities, some of which could be exacerbated by this macro slowdown,” added the firm.
JMP Securities downgraded Snap Inc (NYSE:SNAP) to Market Perform from Market Outperform as the company faces increasing competition from Meta Platforms Inc (NASDAQ:META) and Google’s YouTube (NASDAQ:GOOGL). According to the firm, that short-form video platforms, such as TikTok, Meta’s Reels, and YouTube Shorts, are all taking share of time from Snapchat’s Discover and Stories.
Guggenheim downgraded Workday (NASDAQ:WDAY) to Sell from Neutral with a price target of $142, mentioning it believes the company can hit the fiscal 2024 subscription guidance of 17-19%. However, if that’s all the company does, the firm believes it will become obvious that it’s not a 20% annual grower in later years. “This would jeopardize its long-term targets, but it would take time to play out,” added the firm.
The company’s main focus is on selling major transformative deals that require a substantial financial commitment from the customer and can take a long time to implement. According to the firm, these types of deals are often put on hold, delayed, or even canceled during economic downturns.
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