Downgrades
Citi downgraded Axalta Coating (AXTA) to Neutral from Buy with a price target of $32, down from $39. The firm notes higher raw material prices and low availability that persisted through summer after winter storm Uri have been exacerbated after Hurricane Ida. The firm says shortages, pricing headwinds and the effects of the semiconductor shortage on auto manufacturer builds have led him to downgrade names in the North America commodity chemicals and specialty chemicals space. The firm expects coatings companies to face another margin squeeze like they did in Q2 of this year.
Goldman removed Devon Energy (DVN) from the firm’s Americas Conviction List and keeps a Buy rating on the shares with a $36 price target. The firm believes the shares now reflect greater recognition of Devon’s fixed and variable dividend strategy. The firmstill sees potential for dividend payout increases to drive the next leg of inflection for the shares.
Morgan Stanley downgraded Cisco Systems (CSCO) to Equal Weight from Overweight with a price target of $59, up from $57. The firm notes Cisco’s multiple has expanded to a level nearer to its historical discount to the S&P 500 Index. While the firm remains confident in company’s growth trajectory, the firm says achieving its bull case requires a stronger software growth trajectory, putting the firm on the sidelines heading into upcoming analyst day. The firm says Cisco’s multiple re-rating is largely complete, making further appreciation dependent on earnings upside.