Here are this week’s downgrades to Strong Sell as determined by the POWR Ratings algorithm.
- C3.ai (AI) – an enterprise Artificial Intelligence, or AI, software provider for accelerating digital transformation
- Warner Bros. Discovery (WBD) – a global media and entertainment company whose brands and products include CNN, HBO, HBO Max, HGTV, Food Network, OWN, TNT, TBS, Warner Bros. Pictures, Warner Bros. Television and New Line Cinema
- New Fortress Energy (NFE) – an energy infrastructure company that owns and operates natural gas and liquefied natural gas, or LNG, infrastructure and an integrated fleet of ships and logistics assets
- Transocean (RIG) – an international provider of offshore contract drilling services for oil and gas wells that owns or has partial ownership interests in and operates a fleet of 37 mobile offshore drilling units consisting of 27 ultra-deepwater floaters and 10 harsh environment floaters
- Ardagh Metal Packaging (AMBP) – a supplier of recyclable beverage cans globally that operates 24 production facilities in nine countries
- Avidity Biosciences (RNA) – a biopharmaceutical company working on a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates, or AOCs, whose pipeline has three programs in clinical development
- Sunrun (RUN) – a home solar, battery storage, and energy services company
- Sea Limited (SE) – a consumer internet company founded in Singapore that operates three core businesses across digital entertainment, e-commerce, as well as digital payments and financial services, known as Garena, Shopee and SeaMoney, respectively
- Spectrum Brands (SPB) – a branded consumer products and home essentials company whose brands include Tetra, Nature’s Miracle, OmegaOne, Spectracide, Cutter, Repel, Black Flag, Remington, George Foreman, Russell Hobbs, Black+Decker, PowerXL and Copper Chef
- Ameresco (AMRC) – a cleantech integrator specializing in energy efficiency and renewable energy
- Freyr Battery (FREY) – a developer of next-generation battery cell production capacity which has commenced building the first of its planned factories in Norway and announced potential development of industrial scale battery cell production in Finland and the U.S.
- Melco Resorts & Entertainment (MLCO) – a developer, owner, and operator of integrated resort facilities in Asia and Europe
Learn more about the POWR Ratings
Recent news on these stocks:
March 3
Deutsche Bank raised the firm’s price target on C3.ai to $16 from $11 and keeps a Sell rating on the shares. The company reported fiscal Q3 results that came in better than expected on revenue with the help of increased Services revenue contribution from related party Baker Hughes, the analyst tells investors in a research note.
Piper Sandler raised the firm’s price target on C3.ai to $23 from $13 and keeps a Neutral rating on the shares. The company’s Q3 results came in ahead of expectations and it modestly increased the midpoint of fiscal 2023 revenue targets, the analyst tells investors in a research note. The firm says C3.ai is marching toward profitability by the end of fiscal 2023.
Canaccord raised the firm’s price target on C3.ai to $21 from $14 and keeps a Hold rating on the shares. The analyst said we’ve been consistently bullish on the company’s long-term potential to capture enterprise demand for AI-powered solutions in what is likely the first or second inning of the adoption cycle. We’ve just been cautious on timing, particularly due to the fluid state of the the financials as the company shifts toward consumption pricing and positive EBIT in 2024.
Wedbush raised the firm’s price target on C3.ai to $24 from $13 and keeps a Neutral rating on the shares. The company reported "strong" fiscal Q3 results as it continues to experience increased demand for its artificial intelligence solutions that are designed to increase a range of applications across industries fueling tailwinds in the market, the analyst tells investors in a research note.
March 2
C3.ai reports Q3 adjusted EPS (6c), consensus (22c). Reports Q3 revenue $66.7M, consensus $64.25M. "As we enter Q4 FY 23, we are seeing tailwinds from improved business optimism and increased interest in applying C3 AI solutions to address an increasing range of applications across a broad range of industries," said Thomas M. Siebel, C3 AI CEO. "The overall business sentiment appears to be improving. This is a dramatic change from what we experienced in mid 2022."
C3.ai sees FY23 revenue $264M-$266M, consensus $261.3M. Sees FY23 adjusted net income ($73M)-($69M).
C3.ai sees Q4 revenue $70M-$72M, consensus $69.85M. Sees Q4 adjusted net income ($28M)-($24M).
Scotiabank initiated coverage of Sunrun with an Outperform rating and $40 price target as the firm started coverage on seven companies in the clean technologies space with an initial focus on the residential solar industry.
March 1
Roth MKM analyst Craig Irwin upgraded Ameresco to Neutral from Sell with a $44 price target. The firm believes the SCE project continues to retain an elevated risk profile, but potential financial charges for liquidated damages should be manageable. The rare miss reported in Q4 2022 was attributed to project delays that will remain an overhang into Q1 2023, and likely limit any major rebound in the stock, Roth MKM says. The firm would look for improved confidence in EBITDA growth before potentially becoming constructive on the stock.
Melco Resorts & Entertainment reports Q4 EPS (57c) vs. (34c) last year. Reports Q4 revenue $337.1M vs. $480.6M last year. Lawrence Ho, CEO, commented, "Our results for the fourth quarter of 2022 continued to be impacted by the travel restrictions imposed across mainland China and Macau. However, we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed on January 8, 2023. Our recent performance reinforces our belief in the return of pent-up demand and our view that Macau will continue to develop as a leading international destination for entertainment and leisure. We are honored to have been awarded a gaming concession to continue to operate in Macau for the next 10 years. We greatly appreciate the consideration given to our proposal and our investment propositions that we believe will continue to build on our existing strengths in entertainment and non-gaming attractions. We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau, and will continue to work with the Macau government, the community, and stakeholders to contribute to the city’s development as a leading global tourism destination."
Macau’s gaming bureau reported February gross revenue from games of fortune in the region was up 33.1% year-over-year to 10.32B patacas. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).
February 28
Avidity Biosciences reports Q4 EPS (88c), consensus (89c). Reports Q4 revenue $2.77M, consensus $2.31M. Cash, cash equivalents and marketable securities totaled $610.7M as of December 31, 2022, which reflects $344.6M raised in 2022, inclusive of $223.8M of net proceeds from our follow-on financing. "In 2022, we executed on our goal of advancing three rare disease programs into clinical development and demonstrated the first-ever successful targeted delivery of RNA into muscle, a revolutionary advancement for the field of RNA therapeutics," said Sarah Boyce, president and CEO. "Building on our AOC proof of platform data, 2023 will be another important year for Avidity. We look forward to Phase 1/2 MARINA and MARINA-OLE data as well as results from healthy volunteers in the Phase 1/2 EXPLORE44(TM) trial while continuing to expand the broad utility of our AOC platform."
Craig-Hallum lowered the firm’s price target on Ameresco to $68 from $82 and keeps a Buy rating on the shares. The firm notes Ameresco reported Q4 results which were shy of Street estimates but within the guided range — except for revenue — and its combined backlog remained strong at about $5B with visibility into an additional $1.2B from energy assets not yet contracted. Further, Craig-Hallum believes investors should not let the modest Q4 miss and the Q1 2023 outlook distract from the strong fundamentals across Ameresco’s business and its market leadership in a number of key markets including RNG and energy storage.
Oppenheimer lowered the firm’s price target on Ameresco to $64 from $76 on valuation, while keeping an Outperform rating on the shares. The firm notes shares traded down after hours Monday following Amerescos’ below-consensus Q4 miss and Q1 2023 guidance, reflecting timing delays for both Projects and Assets segments. However, full year 2023 EBITDA guidance, though back-weighted, was in line with the Street and reflects line of sight to key projects’ mid-year completion, Oppenheimer adds.
Baird lowered the firm’s price target on Ameresco to $54 from $70 and keeps an Outperform rating on the shares. The analyst said Q4 results missed our/consensus estimates in part due to decreased Project revenue and unscheduled maintenance at RNG facilities. 2023 guidance was issued below our/consensus estimates and is expected to be 2H weighted.
New Fortress Energy reports Q4 adjusted EPS 87c, consensus 53c. Reports Q4 revenue $731.9M, consensus $734.38M. New Fortress Energy targets 2023 Illustrative Adjusted EBITDA of about $2B.
February 27
Ameresco reports Q4 adjusted EPS 35c, consensus 39c. Reports Q4 revenue $331.7M, consensus $367.64M.
Ameresco sees FY23 adjusted EPS $1.80-$1.90, consensus $1.86. Sees FY23 revenue $1.45B-$1.55B, consensus $1.55B.
Ameresco announced the signing of a definitive purchase and sale agreement to acquire ENERQOS Energy Solutions S.r.l., a renewable energy and energy efficiency company headquartered in Milan. "With this acquisition, Ameresco will be able to expand its portfolio of clean energy projects and solutions throughout Italy. Enerqos has been operating for more than 15 years with the mission of taking care of the environment by offering a competitive advantage to Italian companies through energy efficiency and renewable energy solutions. They have a large portfolio of cost saving and carbon reduction projects across multiple markets in Italy, including healthcare, real estate, retail and residential," the company said.
Avidity Biosciences announced the advancement and expansion of its internal discovery pipeline with the addition of new research and development candidates to treat conditions in skeletal muscle and cardiology. The preclinical programs have been engineered using Avidity’s proprietary AOC platform technology. "With the revolutionary advancement of demonstrating the first-ever successful targeted delivery of RNA into muscle, we are keen to broaden the utility of the AOC platform. We are now pursuing new programs in skeletal muscle and cardiology and believe that there are many more opportunities where AOCs can address debilitating diseases previously unreachable with existing RNA therapies," said Sarah Boyce, president and chief executive officer at Avidity. "We look forward to advancing our own internal research and development programs as well as partnering with collaborators as we work to fulfill our mission to profoundly improve people’s lives by delivering a new class of RNA therapeutics." Avidity continues to advance its three distinct rare disease Phase 1/2 programs in the clinic: AOC 1001 for myotonic dystrophy type 1, AOC 1020 for the treatment of facioscapulohumeral muscular dystrophy and AOC 1044 for the treatment of Duchenne muscular dystrophy mutations amenable to exon 44 skipping. Avidity has decided not to pursue research and development programs in muscle atrophy and Pompe disease at this time.
Ardagh Metal Packaging announced it has acquired a majority share in digital can printers NOMOQ, in a move that extends AMP’s industry-leading support of newcomers to the beverage market. The Switzerland-based start-up, founded in 2021, promises printed cans with short lead times and "NO Minimum Order Quantity" – hence the name. Oliver Graham, CEO of Ardagh Metal Packaging, said: "This latest step in our investment programme is a perfect fit for us, especially following the successful integration of Hart Print in North America which encouraged us to seek a similar model in Europe. NOMOQ’s offer is innovative, customer-centric, and extraordinarily flexible – areas in which AMP has established a great reputation. Their dedication to creating outstanding packaging for customers of all sizes will enhance our ability to serve early-growth customers in the European market and extend our offering to established customers too."
Raymond James upgraded Dyne Therapeutics (DYN) to Strong Buy from Outperform with a price target of $27, up from $16. The firm cites proximity to DM1 data for DYNE-101, which is expected to be positive, and the substantial valuation gap with Avidity (RNA), which should serve as a tailwind in 2023, for the upgrade, the analyst tells investors in a research note. DM1 is, at peak, about a $9B revenue opportunity, which Dyne and Avidity will compete for, the firm says.
Warner Bros. Discovery (WBD) is suing Paramount Global (PARA) after paying $500M for exclusive streaming rights to new "South park episodes" only for Paramount to put new content on its streaming services Paramount+, Joesph Pisani of The Wall Street Journal reports. The lawsuit was filed Friday in the New York State Supreme Court and details how Warner Bros. Discovery paid over $500M in 2019 to have exclusive streaming rights to stream new and existing "South Park" episodes on HBO Max until 2025. The company alleges that Paramount breached its contract to prop up its own streaming service, Paramount+, at the expense of HBO Max. The company did not say how much money it is seeking in the lawsuit, but said it has damages of more than $200M.
Freyr Battery reports Q4 EPS 20c, consensus (22c). "The fourth quarter was punctuated by our successful secondary equity offering and the launch of our expansion into the U.S., which we have since decided to accelerate further," remarked Tom Einar Jensen, FREYR’s Co-Founder and CEO. "Turning our attention to the road immediately ahead, we are announcing the operational startup of the CQP on March 28th, which represents the inaugural launch of clean, next-generation battery technology production on the 24M platform at GWh scale marking a fundamental milestone for the SemiSolid Technology platform. We expect 2023 to be a truly exciting and transformative year for FREYR and our 24M licensing partners as we move into live battery production. Our teams are working tirelessly to achieve key milestones that include, among other things, producing testable batteries from the CQP, continuing the construction of Giga Arctic, running several financing processes in parallel, developing new strategic relationships, and bringing initial production from Giga America online as fast as possible. We ended the year with a nearly identical cash balance to what we started with in 2022 and have in the meantime made strong progress across our entire value chain with an opportunity set in front of us which is more robust than ever."
About "Sell these stocks now"
Each week, The Fly will announce the newest downgrades to Strong Sell in StockNews.com’s POWR Ratings algorithmic model.
This Fly exclusive recap identifies stocks with over a $1B market capitalization that have been downgraded this week to the Strong Sell, or "F," rating in the service’s proprietary model that analyzes 118 different factors, each of which contribute a little to the stock’s predicted likelihood of underperformance. A bell curve distribution of StockNews.com’s ratings shows that only the top 5% of the over 5,000 stocks rated by the system are assigned a "Strong Buy," or "A," rating while the bottom 5% are assigned a Strong Sell. The F-rated stocks would have tumbled an average of 18.98% a year since 1999, according to StockNews.com.
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