5 Downgrades of Note

By Davit Kirakosyan

Today, several brokerages downgraded the shares of five companies, including Weyerhaeuser (NYSE:), Western Digital Corp. (NASDAQ:), Nike (NYSE:), Louisiana-Pacific Corp (NYSE:) and PayPal (NASDAQ:). Below, we provided the details for each downgrade:

BofA Securities downgraded Weyerhaeuser to Neutral from Buy and lowered its price target to $34.00 from $38.00, given its less positive housing outlook and the company’s OSB/wood products exposure.

Deutsche Bank downgraded Western Digital Corp. to Hold from Buy and lowered its price target to $40.00 from $56.00. The analysts think the company’s Q1 (Sep) revenue and EPS are tracking below the low end of guidance, and Q2 (Dec) guidance is also likely to be meaningfully below current consensus estimates.

Barclays downgraded Nike to Equalweight from Overweight and lowered its price target to $110.00 from $125.00. The analysts’ rating is based on (1) the acceleration of the company’s direct-to-consumer strategy, (2) a long-range plan of high-single-digit to low-double-digit revenue growth and mid-to-high-teen EPS growth, (3) gross margin expansion due to cost reduction initiatives and DTC, offset by (1) slowing global consumer spend, (2) slowing China growth, and (3) NA wholesale inventory issues lead to slower sales.

BofA Securities downgraded Louisiana-Pacific Corporation (NYSE:) to Underperform from Neutral and lowered its price target to $56.00 from $64.00 given the analysts’ less positive housing view, as well as the company’s OSB exposure.

Susquehanna downgraded PayPal Holdings Inc (NASDAQ:) to Neutral from Positive and lowered its price target to $100.00 from $115.00. Given Braintree is quickly gaining share within PayPal’s TPV, creating negative leverage from mix (estimated to account for 31% of PYPL’s TPV in 2021 and may reach 44% by 2023, contributing roughly 72% of PYPL’s overall volume growth next year), its unit economics may drag on PayPal’s consolidated results.

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