3 Stocks Dinged With Downgrades

Both AKAM and GMED fell to 12-month lows earlier today

by Patrick Martin

Published on Jan 2, 2019 at 2:12 PM

On the first trading day of 2019, stocks pared their sharp losses and turned higher at midday. Lumber manufacturer Louisiana-Pacific Corporation (NYSE:LPX), cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM), and medical device maker Globus Medical Inc. (NASDAQ:GMED) are all lower on negative analyst attention. Below, we'll take a look at the news on shares of LPX, AKAM, and GMED.

Analyst: Macro Concerns for Louisiana-Pacific Stock

LPX shares were last seen down 5% at $21.10, after receiving a downgrade from BofA-Merrill Lynch to "neutral" from "buy," as well as a price-target cut to $24 from $29. The analyst in coverage urged caution due to U.S.-China trade tensions, as well as the typical sector slowdown around this time of year.

LPX stock earlier traded as low as $20.71, dangerously close to its Dec. 21 12-month low of $20.39. A drop today would snap a four-day winning streak, with the shares' 50-day moving average once more serving as stiff resistance, as it did back in late November/early December. 

As for broader sentiment on the lumber stock, three of five analysts still maintain "strong buy" ratings, and its consensus 12-month price target of $30.11 is a 42.5% premium to its current perch. Additional downgrades or price-target cuts could send LPX even lower.

Cowen Downgrade Sends AKAM to New Lows

Cowen downgraded Akamai Technologies stock to "market perform" from "outperform," while cutting its price target to $73 from $86, citing concerns over the company's revenue growth. At last check, AKAM was down 2.8% to trade at $59.36, and earlier fell to a new 12-month low of $57.53. The cloud stock is fresh off its worst month since May 2017, and has shed nearly 10% year-over-year.

Like Louisiana-Pacific, the analyst community remains mostly bullish. Of the 13 brokerages covering AKAM, eight rate it a "strong buy," with zero "sells" on the books. The stock's consensus 12-month price target, meanwhile, sits up at $83.33, just above its June 21 18-year high of $83.08. 

Morgan Stanley Note Exacerbates GMED Skid

Globus Medical stock is down 7.4% at $40.07, and earlier hit a 12-month low of $39.87. Fueling the drop is a downgrade to "equal weight" from "overweight" at Morgan Stanley, which also trimmed its price target to $49 from $64. GMED nabbed a record high of $57.83 as recently as Nov. 8, but since then has shed 30%, guided lower by its descending 10-day moving average.

For Globus Medical, analysts are much more evenly split. Nearly half rate GMED a "buy" or better. However, its consensus 12-month price target of $59.45 is a 48% premium to its current perch.

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