Top Sell Calls:
1. Olaplex Holdings downgraded to Underweight from Neutral at Piper Sandler
Piper Sandler downgraded Olaplex Holdings ($OLPX (OLAPLEX HOLDINGS INC)) to Underweight from Neutral with a price target of $2, down from $3. Piper's quarterly salon survey shows that instead of seeing improvement, "things look to have stabilized at a weaker level." The firm now struggles to see a scenario of share gains going forward and better margin recovery. Respondents noting Olaplex as a preferred brand is still weak, penetration within the salon seems to have leveled out at 60%, and over half of respondents are still calling out negative Olaplex treatment demand impacts from macro environment and competition remains elevated, says Piper.
2. Genpact downgraded to Underweight from Neutral at JPMorgan
JPMorgan downgraded Genpact ($G (Genpact Limited)) to Underweight from Neutral with an unchanged price target of $40. Relative to Cognizant ($CTSH (Cognizant Technology Solutions Corp)), Genpact's stock "tolerance to continued muted" short-cycle work and any potential slowing of large deal backlog is weaker, considering a steeper second half of 2023 ramp implied in its guidance, the firm tells investors in a research note. JPMorgan says that while the stock isn't expensive, Genpact's margin for error seems lower to meet second half targets that requires large deal momentum to continue.
3. Celldex initiated with an Underweight at Wells Fargo
Wells Fargo initiated coverage of Celldex ($CLDX (Celldex Therapeutics Inc)) with an Underweight rating and $21 price target. The firm believes Celldex's barzolvolimab will be efficacious in chronic spontaneous urticaria, but thinks the Street is overly optimistic on its commercial potential given its "less-than-ideal" safety profile, the more advanced competition and time required for Phase 3 trials. The stock's risk/reward is skewed to the downside for barzolvolimab into Phase 1 readout in Q4, Wells tells investors in a research note.
4. Medical Properties Trust downgraded to Underweight from Neutral at JPMorgan
JPMorgan downgraded Medical Properties Trust ($MPW (Medical Properties Trust Inc)) to Underweight from Neutral with a price target of $7, down from $9. The firm says the recent stock action related to the negative Wall Street Journal story about the Prospect deal and Medical Properties' rebuttal press release "underscore how sensitive this stock has become to tenant headlines/dynamics." With stock trading in the mid-to-high single digits and its spot debt costs "arguably being quite high," the company's external growth engine continues to be "in the box" and future debt refinancing headwinds "could be quite real given the current backdrop," JPMorgan tells investors in a research note. In addition, the firm does not see any economic rationale for Medical Properties maintaining the current dividend level, which is now translating into a 17% yield.... Show More
