Investing

8 Stocks Analysts Want You to Sell Into the Raging Bull Market

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Now that the bull market is nearing nine years old, and after the Dow rose 25% and the S&P 500 rose 19% in 2017, investors are considering how they want to position themselves for continued gains in 2018 and beyond. The market is already off to one its strongest starts in years on the heels of tax reform and heading into accelerated gross domestic product and earnings growth. Some investors might imagine that almost all stocks have risen like the Dow and S&P 500 have risen 300% from the panic selling lows of 2009. Unfortunately, that’s far from the truth.

It just so happens that some stocks have fallen from grace. And some Wall Street analysts and market pundits see some companies being serious losers ahead, even if the bull market rages on. 24/7 Wall St. tracks dozens of analyst calls each trading day, and this becomes hundreds of analyst calls each week. Some of those analyst calls cover stocks that analysts want their clients to sell or to avoid.

Imagine what the implications are for a company to be performing poorly during a great economy and a raging bull market. Maybe it’s just a matter of a stock’s valuation exceeding prior targets, or maybe it is something that things are going rather poorly for the company. Some companies just never seem to be on the right footing, even in the best of times.

24/7 Wall St. has tracked eight well-known stocks that analysts are telling their clients to sell or to avoid in 2018. Consensus price targets are from Thomson Reuters, and additional color has been added on most of these calls.

Analysts on Wall Street predict these eight stocks will not participate with further upside in this raging bull market in 2018.

Etsy Inc. (NASDAQ: ETSY) has more than doubled from its lows in 2017, and that may be about all investors can hope for, if one analyst is right. Morgan Stanley downgraded the stock to Underweight from Equal Weight and cut its target price to $17 on January 12.

The online craft goods seller previously traded at $20.56, and Etsy shares closed down 5% at $19.54 on the same day. Its 52-week trading range is $9.41 to $21.86, and the consensus analyst price target is now closer to $18.

GoPro Inc. (NASDAQ: GPRO) seriously needs new leadership after its latest round of layoffs, lower guidance and exit from the drone market. The shares were downgraded to Neutral from Buy at Longbow Research on January 8, but on January 9 Dougherty reiterated its Sell rating and slashed its price target to $4 from $7. Wedbush Securities also maintained a Neutral rating on January 9, but the firm slashed its price target to $6 from $10.50.

GoPro shares closed out Friday at $6.23, and the stock is now down over 30% so far in 2018. It had a 52-week range of $7.14 to $11.89, but now its 52-week low is $5.04.

JinkoSolar Holding Co. Ltd. (NYSE: JKS) was started with a Sell rating by Goldman Sachs on January 9, and it was assigned a $16 price target, which compares with a $24.13 prior closing price.

Surprisingly, Jinko Solar shares have seen very little volatility in 2018. At $24.59 as of Friday’s close, the stock has a 52-week range is $13.70 to $30.50, and its consensus target price now is down around $18.

PG&E Corp. (NYSE: PCG) had a double whammy of woes in 2017 with wildfires in California and the recent flooding and mudslides that haven’t helped matters. Guggenheim lowered its rating to Sell on January 2, and Goldman Sachs lowered its rating to Neutral on the same day.

PG&E shares closed down just six cents at $43.82 on Friday, but that is down from a $44.83 close on the last day of 2017. The stock has a 52-week range of $41.61 to $71.57, and its consensus target price is now under $55.

Rite Aid Corp. (NYSE: RAD) was a company that 24/7 Wall St. sees as a potential turnaround stock for later in 2018, but its stock remains battered from its 2017 highs. Evercore ISI started Rite Aid as Underperform and assigned a $1.50 price target on January 5. That was after previously closing at $2.08.

Rite Aid shares managed to rise to $2.39 after this call, and the troubled retail pharmacy chain was trading at $1.97 at the end of 2017. It has a 52-week range of $1.38 to $8.77 and a consensus analyst target of $2.07.

Snap Inc. (NYSE: SNAP) still wants to tout itself as a camera company, but the rest of us know better. Multiple analysts now see even more downside, since the social media player is having a hard time generating more users and keeping advertisers interested in a product that disappears so quickly.

Snap was downgraded to Underperform from Market Perform at Raymond James on January 12, noting that user growth will remain challenging. We also saw Morgan Stanley, with an Underperform rating, lower its price target to $10 from $11 in another cautious call. Snap was downgraded to Hold from Buy with a $15 price target at Jefferies on January 8. Cowen even cut the stock to Underperform from Market Perform with an $11 target on January 4.

Snap ended the week of January 12 with a 3.3% drop to $14.11, in a 52-week range of $11.28 to $29.44. It still somehow has a $17 billion market cap. The consensus target price was $12.33 on last look, and its stock was at $15.38 during the first two trading days of 2018.

Southern Co. (NYSE: SO) was downgraded to Sell from Neutral at Goldman Sachs on January 11, and the price target is now $45. On January 12, JPMorgan initiated the stock with an Underweight rating and a $46 price target.

It closed out Friday with a 0.9% loss for the day at $44.84, and shares hit a year low, as the 52-week range is now $44.44 to $53.51. Southern has a $50.03 consensus price target. While the $50 billion power generation provider has close to a 5% yield, this stock was $47.20 earlier in the week, and it closed out 2017 at $48.09.

Under Armour Inc. (NYSE: UAA) has seen two very cautious calls in 2018. The sports apparel maker was downgraded to Negative from Neutral with an $11 price target (versus a $15.98 close ahead of the call) at Susquehanna. This is the same as a Sell rating elsewhere, and the firm feels no serious turnaround is in sight. CFRA Research (S&P) also lowered Under Armour’s rating to Sell with a note that further weakness is expected while it is also being very promotional to generate more sales.

Under Armour shares most recently closed at $15.12, in a 52-week range of $11.40 to $31.06 and with a consensus price target of $13.91.

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