Analyst Downgrades Netflix, Fortinet, Tractor Supply Company, and JD.com Ahead of Earnings
Netflix Stock Falls after Wolfe Research Downgrade
Netflix shares dropped over 2% in pre-market trading today following a downgrade by Wolfe Research. The company’s rating was downgraded from Outperform to Peerperform due to concerns about 2024 ARPU expectations and future growth. Wolfe Research analysts commented that the current paid-sharing net adds could lead to gross add shortfalls in the future.
The analysts also expressed doubt that Netflix’s premium valuation compared to the S&P would hold up if future growth falls short. Netflix is scheduled to release its Q3/23 earnings on October 18.
Fortinet Shares Fall after Barclays Downgrade
Fortinet shares declined more than 3% in pre-market trading today after Barclays downgraded the company from Overweight to Equalweight. Barclays also cut its price target for Fortinet from $71.00 to $63.00. The downgrade was based on negative findings from the analysts’ checks, which indicated a decreased emphasis on firewall refresh as a spending priority and potential valuation declines in the SASE market.
Barclays analysts mentioned that they still believe in Fortinet’s platform approach and see terminal value in the stock. However, they view the risk/reward balance as balanced, which supports their Equalweight rating.
Tractor Supply Company and JD.com Receive Downgrades
Oppenheimer downgraded Tractor Supply Company from Outperform to Perform and lowered its price target from $280.00 to $210.00. The analysts expressed concerns about a potential sales expansion lull post-pandemic, which they believe is not adequately priced into Tractor Supply shares.
JD.com received downgrades from two Wall Street firms. Morgan Stanley downgraded the company from Overweight to Equalweight and set a price target of $33.00, while Macquarie downgraded JD.com from Outperform to Neutral and set a price target of $32.00. Macquarie mentioned that the market is concerned about JD.com’s lackluster growth outlook.
These downgrades highlight the challenges these companies face in meeting growth expectations. Investors will be closely watching their upcoming earnings reports for further insights into their performance.
