4 big analyst cuts: Block hit with a downgrade on macro concerns

Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: Downgrades for Block, RingCentral, Lumentum, and TechTarget.

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Block downgraded to Underperform after Q1 beat
CLSA downgraded Block (NYSE:SQ) to Underperform from Buy and cut its price target to $63.00 from $93.00 due to concerns about the macro environment, as InvestingPro reported in real-time.

The firm is stepping aside on Block due to rising odds of a hard landing in the U.S. in H2/23, as regional bank retreat applies more pressure on consumers and SMBs. Shares have lagged behind the market post-decent Q1 earnings print last week as investors adjust to a lower earnings trajectory in 2024.

Shares were losing 3% in the premarket.

RingCentral downgraded to Neutral after a strong Q1 beat
Goldman Sachs downgraded RingCentral (NYSE:RNG) to Neutral from Buy and cut its price target to $37.00 from $52.00 after the company reported a Q1 beat and raised its guidance, which resulted in a stock price jump of 14% yesterday.

According to the firm, since adding the company to the Buy list in Dec 2021, the stock is down around 83%, noting it had overestimated the durability of over 20% top-line growth, which has since decelerated significantly.

The firm prefers to move to the sidelines until it gains conviction that RingCentral can sustainably re-accelerate subscription revenue growth beyond 11%.

InvestingPro subscribers got news of this downgrade in real-time. Never miss another market-moving headline.

2 more downgrades
Barclays downgraded Lumentum (NASDAQ:LITE) to Equalweight from Overweight and cut its price target to $40.00 from $55.00, noting that the company’s outlook has been revised too many times.

The firm noted that the expectations were already low after the preliminary announcement in early April. However, the forecast for the remainder of the year was further adjusted due to headwinds in all areas.

The company reported its Q3 results on Tuesday, with EPS/revenues, as well as Q4 guidance missing the Street estimates.

Goldman Sachs downgraded TechTarget (NASDAQ:TTGT) to Sell from Neutral and cut its price target to $27.00 from $52.00.

Shares fell more than 7% yesterday despite the company reporting better-than-expected Q1 EPS and in-line revenues.