Anthera Pharmaceuticals (NASDAQ:ANTH) was downgraded by analysts at Piper Jaffray Companies from an overweight rating to an underweight rating.
Armstrong World Industries (NYSE:AWI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “For 2018, Armstrong World guided net sales to grow in the range of 5-7% aided by a modest upturn in volume and AUV improvement. Further, the tax reform will reduce its tax rate from 35% to 25%. Thus, Armstrong World expects EPS to grow in the range of 17-24% in the year. Productivity improvements in plants and focus on restructuring activities will also aid the bottom line. Further, continued sales leverage and capital investments at Tectum will fortify its Architectural Specialty business. Moreover, investment in new products, segment reclassification and strong balance sheet will drive Armstrong World’s growth. Over the past year, the stock has outperformed the industry. However, operational headwinds in Armstrong World’s manufacturing facilities will hurt growth. In addition, the underlying fundamentals for repair and remodel activity remain uneven, which might impact results.”
Enbridge Energy Partners (NYSE:EEP) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Enbridge Energy Partners units underperformed the broader industry in the last year. The partnership’s U.S. L3R Program in Wisconsin and the Canadian L3R Program cost has been revised about 12% above the original estimate at the time the project was approved in 2014. This mainly reflects delays in the regulatory process, changes in scope and route alteration as well as other changes that resulted from the extensive consultation process. Any further delay in starting the project may increase costs, which is detrimental to the partnership’s growth. Additionally, the high capital expenditure required for the ambitious growth plans may reduce cash distribution growth. Moreover, the rise in debt burden and decline in cash balance reflect the weakness in the partnership’s balance sheet.”
General Dynamics (NYSE:GD) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “General Dynamics remains one of the only two contractors in the world equipped to build nuclear-powered submarines and its diverse portfolio of products and services. Moreover its wide customer base provides it with an opportunity to generate solid revenues from different sources. The company will likely see solid growth momentum, following the introduction of the G600 in 2018. General Dynamics is committed to R&D activities that facilitate the introduction of new products and first-to-market enhancements. However, General Dynamics operates in a highly competitive market and has to rely on other companies to provide materials, components and subsystems for its products. The company’s dependence on international sales for a major portion of its revenues exposes it to the risk of currency fluctuations and other geo-political risks. The company's shares also underperformed its broader industry in the last one year.”
HollyFrontier (NYSE:HFC) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “HollyFrontier is one of the largest independent oil refiners in the U.S. with the capability to process a wide mix of crude. While its access to some of the fastest growing domestic markets bode well for the downstream operator, the Petro-Canada Lubricants acquisition has helped HollyFrontier expand into a high-margin, less competitive business. A strong financial position and attractive yields are other positives in the HFC story. However, HollyFrontier has been bogged down by contracting refining margins. In fact, the company delivered weaker–than-expected results in 4Q17 amid lower refined margins compared with 3Q17. Further, the U.S. refiners are feeling the pinch of higher RFS costs to comply with new cleaner gasoline production rules. Given these factors, we take a cautious stance on the prospects of the stock.”
Lithia Motors (NYSE:LAD) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Lithia Motors’ earnings and revenues beat the Zacks Consensus Estimate in the fourth quarter. Compared to the year-ago figures, both earnings per share and revenues were higher. The company is expected to benefit from the frequent acquisitions and store openings. In March, the company announced acquisition of six auto stores from Prestige Family of Fine Cars in Bergen County, NJ, which are likely to generate steady state revenues of $900 million, annually. Also, in order to boost shareholder confidence, the company frequently engages in dividend payouts and share-repurchase programs. Lithia Motors has also provided a strong fiscal 2018 guidance. However, extensive merchandise inventory, continuous rise in SG&A expenses, rising competition and pricing transparency are few concerns for Lithia Motors. Also, in last three months, its shares have underperformed the industry it belongs to.”
L3 Technologies (NYSE:LLL) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “L3 Technologies enjoys a leading position in defense electronics, communications and ISR markets. Moreover, its consistent growth in the commercial aviation space, especially in North America and Europe, is appreciable. The company also follows a disciplined divestment strategy to efficiently focus on its core operations. In addition to its strong presence in the U.S. defense space, the company continues to enjoy a steady flow of Foreign Military Sales (FMS) contracts as well. However, high interest rate leads the company to bear high interest expenses which in turn may put weigh on its bottom line. It has also witnessing weak performance in some of its product lines. The most worrying aspect of this is the downward trend in margins for service-related work due to competitive pressure. Due to such reasons, the company may have underperformed its broader industry in the last one year.”
Nucor (NYSE:NUE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Estimates for Nucor for the current quarter have been stable of late. Nucor remains committed to expand its production capabilities and grow its business through strategic acquisitions. It is also seeing continued momentum in the automotive market. However, Nucor’s shares have underperformed the industry it belongs to over a year. Moreover, the U.S. steel industry is adversely affected by cheaper imports, which is likely to hurt margins in the Steel Mills unit in first-quarter 2018. Nucor also faces soft demand in certain markets including non-residential construction.”
Oclaro (NASDAQ:OCLR) was downgraded by analysts at Loop Capital from a buy rating to a hold rating.
PetroChina (NYSE:PTR) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “ADRs of PetroChina have declined 5% over the last year, underperforming the Zacks International Integrated Energy industry, which has gained 8% over the same period. But with higher commodity prices and operational efficiency helping the state-run giant report strong Q3 results, the stock might return to favor. A tight leash on oil and gas lifting expenses that decreased 1.9% from the same period last year, also helped results. The energy titan also experienced strong natural gas demand, while operational optimization helped control costs. However, we are concerned over China’s decision to cut natural gas prices for industrial users that reduced margins in PTR’s gas-wholesale business. A limited international operation and an ambitious investment program give investors more reason to be cautious on the stock.”
Raytheon (NYSE:RTN) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Raytheon's share price outperformed the broader industry over the last one year. The company is one of the best-positioned large-cap defense players due to its non-platform centric focus. Due to its wide range of combat-proven defense products, the company continues to receive numerous orders from both Pentagon as well as foreign allies. Moreover, the company is a strong cash generator, which allows it to pay attractive dividend to shareholders. Raytheon has a distinct focus on its overseas business. Foreign military contracts continue to be the vital growth driver for Raytheon. However, factors like tough competition and political uncertainty continue to be major headwinds for Raytheon. Company’s sales from international markets are subject to country-specific risk related to political stability and regime change. The enactment of the Tax Cuts and Jobs Act of 2017 had an unfavorable provisional tax relatated impact on its bottom line.”
Verizon Communications (NYSE:VZ) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Verizon’s unlimited data plans have heated up the wireless industry and helped it witness the addition of 1.174 million postpaid customers in fourth-quarter 2017. The telco’s plan to launch 5G wireless broadband services in U.S. markets in 2018 looks good. Further, the company is planning to launch a theme-based online streaming TV service in 2018, backed by the digital streaming deal with the National Football League. Meanwhile, the company continues to target the SMB segment with Fios TV services and boost its fiber network assets with new buyouts. The company expects growth in 2018 on the back of the expected savings from tax reform. In fact, in the past three months, the stock price outperformed its industry. However, Verizon continues to struggle in a highly competitive and saturated wireless market. Losses in wireline access lines, marketing costs of promotional plans, competitive video market are other major risks.”
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