Carrier slashed after its big acquisition: 4 big analyst cuts

Investing.com -- Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Foot Locker, Carrier Global, Jack Henry, and Welltower.

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Carrier Global cut to Underperform

Carrier Global (NYSE:CARR) shares fell more than 1% Thursday after Wolfe Research downgraded the company to Underperform from Peerperform with a price target of $56.00.

"The bottom line is that we now see 11% EPS dilution for 2025 as we factor in a more challenging outlook for EU heat pump demand and now see risk that Viessmann financing costs could be closer to 6.5% (vs. prior 5.5%),” noted Wolfe Research, referring to the company's April agreement to purchase the largest segment of Viessmann Group, Viessmann Climate Solutions, for €12 billion ($1 = €0.95).

The analysts also adjusted their 2024 Viessmann organic growth estimate to 5% from 10% - a decision influenced by a notable decline in German subsidy applications this year, which impacted by reduced and delayed regulatory incentives and an unfavorable cost ratio of electricity vs. natural gas prices.

“In other words, the economics of heat pump replacement do not currently pencil out across much of Europe,” said the analysts.

Carrier shares were off 1.2% to $55.37 in recent trading.

Foot Locker slashed to Sell

CFRA downgraded Foot Locker (NYSE:FL) to Sell from Hold with a price target of $15.00 on Wednesday, as reported in real time on InvestingPro.

Following a 25% surge in Foot Locker’s stock price since its August low, the analysts adopt a cautious outlook as the stock trades at 13x the consensus estimates for next-12-month EPS, which is notably higher than its historical price-to-earnings (P/E) average.

Foot Locker faces challenges from declining in-mall sales and a shift by brands toward direct-to-consumer models. “We also expect the low- to middle-income consumer in the U.S. to feel pressure over the next 12 months as excess savings runs out, student loan payments resume, and higher rates impact spending,” noted CFRA.

The analysts also believe that Foot Locker will need to undertake aggressive promotions for several more quarters to align its inventory with sales and advise avoiding the stock until Foot Locker reduces its inventory and improves its operational performance.

Shares ticked lower on Wednesday but were rising 1.5% to $20.89 in recent trading Thursday.

Two more downgrades

Goldman Sachs downgraded Jack Henry & Associates (NASDAQ:JKHY) to Sell from Neutral with a price target of $140.00. Shares were lately falling 1.7% to $144.63.

JPMorgan downgraded Welltower (NYSE:WELL) to Neutral from Overweight with a price target of $90.00. Share were down 1.1% to $84.84 in recent trading.

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