Fathom Digital price target lowered to $1 from $3.50 at Stifel

Stifel lowered the firm’s price target on Fathom Digital to $1 from $3.50 and keeps a Buy rating on the shares. Despite expectations of positive Q3 2022 order trends materializing into revenue in Q4 2022, Fathom was negatively impacted in the quarter by inventory reductions at its production customers, particularly in the capital goods, semiconductor, and building industries, the firm notes. During Q1 2023, management has spoken with at least 50 of its top 100 customers and indications are that inventories have been reduced to unsustainable levels, setting up for a rebound in the second half of 2023, Stifel says. Expectations are that orders should pick up in the April to June timeframe.