Spotify downgraded, 'darkest days of this downturn are ahead': 4 big analyst cuts

By Davit Kirakosyan

Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Spotify, Wells Fargo , ResMed, and Agora.

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Spotify slashed to Neutral

Monness, Crespi, Hardt downgraded Spotify Technology (NYSE:SPOT) to Neutral from Buy.

Given the significant stock outperformance this year and growing concerns about potential collateral damage from this downturn, the firm decided to adopt a more cautious stance on Spotify.

The company is scheduled to report its Q3 results on October 24, and while Monness, Crespi, Hardt said Spotify is riding a favorable long-term trend, enhancing its platform, tapping into a large digital ad market, expanding its audio offerings, and improving its cost structure, they highlighted that the company faces intense competition and thin margins. As a result, the firm believes that "the darkest days of this downturn are ahead of us”.

Wells Fargo cut to Hold due to lack of near-term catalysts

CFRA downgraded Wells Fargo (NYSE:WFC) to Hold from Buy and cut its price target to $45.00 from $50.00, as reported in real-time on InvestingPro.

The company’s shares have exhibited a sideways trading pattern since the beginning of 2023, and CFRA believes there are no near-term catalysts that are likely to boost the share price.

We think WFC is on the right path with improved execution, but the Fed's asset freeze (put in place in February 2018) limits upside earnings and significantly higher return on equity.

Two more downgrades

Agora (NASDAQ:API) shares dropped more than 11% yesterday after Morgan Stanley downgraded the company to Equalweight from Overweight and cut its price target to $3.20 from $4.60, citing a lack of signs of meaningful revenue recovery.

“The key issue remains a lack of emerging use cases contributing to incremental volume,” mentioned Morgan Stanley.

Wolfe Research downgraded ResMed (NYSE:RMD) to Peerperform from Outperform.

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