3 Stocks to Watch After Downgrades

All three stocks are falling before the market's open

Deputy Editor
Jan 17, 2023 at 9:28 AM
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The brokerage bunch is busy this morning, with Pfizer Inc. (NYSE:PFE), Wendy's Co (NASDAQ:WEN), and Snap Inc (NYSE:SNAP) all receiving downgrades before today's open. 

Pfizer in Need of "Covid Reset"

Wells Fargo downgraded Pfizer stock to "equal weight" from "overweight," saying the biotech company "needs a Covid reset" before the shares can stage a comeback. The brokerage also said it expects lower adjusted profit between 2023 and 2025, specifically due to lower sales of Covid-related products.

At last check, PFE is saddled with a 2% premarket loss, last seen trading at $46.91. The equity is poised to add to its 13.9% year-over-year deficit, and, should these losses hold, pacing for its second close below its 100-day moving average since November.

Look Anywhere but Wendy's for Upside, Says Analyst

While no less than seven analysts hiking their price targets on Wendy's stock, Deutsche Bank cut its rating to "hold" from "buy." The Wall Street broker's bear note cited the stock's valuation, advising investors to look elsewhere in the restaurant sector for better upside potential. 

In response, WEN was last seen trading 1.1% lower at $22.82 before the open, pulling back dangerously close to its year-to-date breakeven mark. Coming into today, eight of 18 covering brokerages still rate the equity a "strong buy" -- both of which indicate more analyst action to the downside could soon come in -- though its average 12-month target price is a slight premium to Friday's close.

Watch Out Snap, Here Comes the Competition 

Competition is ramping up for Snap, according to JMP Securities. The analyst downgraded Snap stock to "market perform" from "market outperform," as Instagram Reels and YouTube shorts move in on the camera and social media company's specialty. In addition, declining time spent on Snap was cited in the bear note.

Just before Wall Street's open, SNAP is down 1.1% to trade at $9.69. The shares' 80-day moving average has kept a firm lid on any positive price action over the last month, while Snap stock contends with a hefty 75.5% year-over-year deficit.

 

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