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5 analyst cuts of the day: Coinbase skewered after 'Wells Notice' | Pro Recap

By Davit Kirakosyan -- Here is your daily Pro Recap of the biggest analyst cuts you may have missed since yesterday.

Analysts apprehensive on Coinbase, including a downgrade, after 'Wells Notice'

Coinbase (NASDAQ:COIN) shares were dropping more than 15% after the company said it received a ‘Wells Notice’ from the U.S. Securities and Exchange Commission (SEC), leading to a raft of analyst concerns.

A Wells Notice, which in this case related to Coinbase's staking services, is usually a precursor to the SEC ultimately suing the company due to certain infractions.

Oppenheimer cut the stock to Perform from Outperform, citing an “unhealthy regulatory climate" and noting that shares were up 118% year to date as of yesterday's close vs. a 3% gain for the S&P 500.


Barclays (LON:BARC), for its part, sees “heightened potential regulatory risk" for the company, and Mizuho said the latest development “could potentially impact up to one-third of COIN’s revenue."

Shares were recently changing hands at $65.28.

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Chewy downgraded to Hold following Q4 earnings report

Deutsche Bank downgraded Chewy (NYSE:CHWY) to Hold from Buy and cut its price target to $35.00 from $41.00.

The company’s shares closed more than 5% lower yesterday and are currently trading 6% lower pre-market despite the company reporting its Q4 results, with EPS/revenue beat. Users declined by approximately 120,000 during the quarter and pricing was the primary upside driver across the P&L.

According to Deutsche Bank, most concerning was the outlook for 2023, suggesting that while users will flip positive this year, the magnitude of that user growth is likely tepid at best.

“While we appreciate that the macro environment remains an overhang to user growth at the moment, in order to confidently underwrite upside to either estimates or valuation, which sits at ~35x 2024 EBITDA, we believe investors need confidence in the user growth trajectory, something that is in short supply for Chewy at the moment,” said the firm.

Shares were sliding 5% to $35.83.

AMC Entertainment resumed with Sell at Citi

Citi resumed coverage on AMC Entertainment (NYSE:AMC) with a Sell rating and a price target of $1.60.

While the firm suspects AMC may be able to reduce leverage as the U.S. box office recovers and via equity issuance, they believe the company’s common equity is overvalued at prevailing levels.

2 more downgrades

Morgan Stanley downgraded Samsara (NYSE:IOT) to Equalweight from Overweight with a price target of $19.00 (from $18.00). Shares are currently down 2% pre-market.

Compass Point downgraded Sunstone Hotel Investors (NYSE:SHO) to Sell from Neutral with a price target of $9.00. Shares fell more than 5% yesterday.

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