Federal Reserve Chair Jerome Powell has firmly re-iterated that interest rate hikes are unavoidable in the upcoming quarters to bring about price stability. This has led to widespread bearish sentiment across sectors, and stocks are estimated to plummet further. The CNN Business Fear & Greed Index has also shown ‘Extreme Fear’ signs over the past week.
Moreover, recession fears pushed U.S. stocks briefly into a bear market. The SPDR S&P 500 Trust ETF (SPY) lost 2.6% over the past five days. Since fundamentally weak stocks might not be able to dodge the expected market fluctuations, popular analysts have recently downgraded many of them.
Therefore, Under Armour, Inc. (UAA), Winnebago Industries, Inc. (WGO), Thor Industries, Inc. (THO), The Bank of New York Mellon Corporation (BK), and Wipro Limited (WIT), which analysts have recently downgraded, are best avoided now.
Under Armour, Inc. (UAA)
UAA and its subsidiaries develop, market, and distribute performance apparel, footwear, and accessories for men, women, and youth. The company offers its apparel in compression, fitted, and loose fit types. On May 19, 2022, Morgan Stanley analysts downgraded UAA to an Equal-weight rating.
UAA’s net revenues increased 3.5% year-over-year to $1.30 billion for the quarter ended March 31, 2022. However, its net loss came in at $59.61 million, compared to a net income of $77.75 million in the year-ago period. Also, its loss per share came in at $0.13, compared to an EPS of $0.17 in the prior-year period. Its cash and cash equivalents came in at $1.01 billion for the period ended March 31, 2022, compared to $1.67 billion for the period ended December 31, 2021.
Analysts expect UAA’s EPS to fall 79.2% to $0.05 for the quarter ended June 2022. Over the past six months, the stock has lost 64.2% to close Friday’s trading session at $9.64.
UAA’s POWR Ratings reflect its poor prospects. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a D grade for Growth, Stability, and Sentiment. Click here to access the additional POWR Ratings for UAA (Value, Momentum, and Quality). It is ranked #21 of 37 stocks in the Athletics & Recreation industry.
Winnebago Industries, Inc. (WGO)
WGO manufactures and sells recreation vehicles and marine products primarily for leisure travel and outdoor recreation activities. The company operates in six segments: Grand Design Towables; Winnebago Towables; Winnebago Motorhomes; Newmar motorhomes; Chris-Craft Marine; and Winnebago Specialty Vehicles. On May 19, 2022, DA Davidson downgraded WGO.
WGO’s net revenues increased 38.7% year-over-year to $1.16 billion for the second quarter ended February 26, 2022. However, its cash and cash equivalents came in at $134.83 million for the period ended February 26, 2022, compared to $434.56 million for the period ended August 28, 2021. Its total current assets came in at $1.01 billion compared to $1.06 billion for the same period. Moreover, its net long-term debt came in at $536.99 million compared to $528.56 million for the same period.
WGO’s revenue is expected to decrease 8.4% to $4.28 billion in 2023. Its EPS is expected to decline 21.2% to $9.67 in 2023. Over the past six months, the stock has lost 37.2% to close yesterday’s trading session at $45.31.
WGO has a D grade for Stability. We’ve also rated it for Growth, Value, Momentum, Sentiment, and Quality. Click here to access all the WGO ratings. It is ranked #19 of 68 stocks in the F-rated Auto & Vehicle Manufacturers industry.
Thor Industries, Inc. (THO)
THO designs, manufactures, and sells recreational vehicles (RVs), and related parts and accessories in the United States, Canada, and Europe. It offers travel trailers; gasoline and diesel Class A, Class B, and Class C motorhomes; conventional travel trailers and fifth wheels; luxury fifth wheels; and motor caravans, caravans, campervans, and urban vehicles. On May 19, 2022, THO got downgraded by DA Davidson.
For the second quarter ended January 31, 2022, THO’s net sales increased 42.1% year-over-year to $3.88 billion. However, its cash and cash equivalents came in at $330.32 million for the period ended January 31, 2022, compared to $448.71 million for the period ended July 31, 2021. Its long-term debt came in at $2.17 billion compared to $1.59 billion for the same period. Moreover, its other long-term liabilities came in at $339.41 million, compared to $316.38 million also for the same period.
THO’s revenue is estimated to decline 15.6% to $13.51 billion in 2023. Its EPS is expected to decrease 33.6% to $11.87 in 2023. Over the past six months, the stock has lost 37.1% to close Friday’s session at $69.42.
THO’s POWR Ratings are consistent with this bleak outlook. It has a D grade for Sentiment.
We have graded THO for Growth, Value, Stability, Momentum, and Quality. Click here to access all of THO’s ratings. It is ranked #16 of 68 stocks in the Auto & Vehicle Manufacturers industry.
The Bank of New York Mellon Corporation (BK)
BK provides a range of financial products and services in the United States and internationally. The company operates through Securities Services; Market and Wealth Services; Investment and Wealth Management; and Other segments. On May 19, 2022, Deutsche Bank Aktiengesellschaft downgraded BK from a Buy to a Hold.
BK’s total revenue came in at $3.93 billion for the first quarter ended March 31, 2022, compared to $3.92 billion in the year-ago period. However, its net income decreased 17.9% year-over-year to $765 million, while its EPS came in at $0.86, down 11.3% year-over-year. In addition, its goodwill came in at $17.46 billion for the period ended March 31, 2022, compared to $17.51 billion for the period ended December 31, 2021.
Over the past six months, BK has lost 23.3% to close Friday’s session at $43.77.
BK has a D grade for Growth and Sentiment. Click here to access the additional POWR Ratings for BK (Value, Momentum, Stability, and Quality). It is ranked #43 of 60 stocks in the Asset Management industry.
Wipro Limited (WIT)
Based in Bengaluru, India, WIT operates as an information technology (IT), consulting, and business process services company worldwide. It operates through three segments: IT Services; IT Products; and India State-Run Enterprise Services (ISRE). On May 19, 2022, JPMorgan Chase downgraded WIT from Neutral to Underweight.
WIT’s revenues increased 28.4% year-over-year to $2.75 billion for the fourth quarter ended March 31, 2022. However, its cash and cash equivalents came in at $1.37 billion for the period ended March 31, 2022, compared to $2.19 billion for the period ended March 31, 2021. Its total current liabilities came in at $4.06 billion compared to $2.97 billion for the same period. Also, its total liabilities came in at $5.54 billion compared to $3.57 billion for the same period.
WIT missed EPS estimates in two of the trailing four quarters. Over the past six months, the stock has lost 33.9% to close Friday’s session at $5.94.
WIT’s POWR Ratings are consistent with this bleak outlook. It’s ranked #7 of 10 stocks in the Outsourcing - Tech Services industry. To see more of WIT’s component grades, click here.
UAA shares rose $0.06 (+0.62%) in after-hours trading Monday. Year-to-date, UAA has declined -54.27%, versus a -16.17% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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