Stocks To Sell

Citi Just Cut Its Price Target on These 3 Stocks

These stocks can come under pressure as analysts take a dim view from Citi price target cuts

Amid the current earnings season, with brokers actively revising price targets, Citigroup (NYSE:C) recently reduced its 12-month targets for several companies. Therefore, we discuss three stocks affected by the recent Citi price target cuts today.

When analysts update their views on shares, investors pay attention. Yet, a recent report covering 2002-2021 revealed an average difference of 8.3% between estimated and actual prices. Thus, whether you’re a seasoned investor or new to Wall Street, understanding why and how analysts raise or lower target prices helps make better-informed investment decisions. But at the end of the day, long-term investors should always do their due diligence to see if owning a specific company fits their overall risk tolerance. With that said, here are three stocks among the names of Citi’s price target cuts.

BioMarin Pharmaceutical (BMRN)

Biotech company BioMarin Pharmaceutical (NASDAQ:BMRN) is the first name among the stocks with Citi price target cuts. The company, which focuses on developing treatments for rare genetic diseases, recently reported robust financial results. Total revenues increased by 9% year-over-year (YOY) to $649 million, translating into a non-GAAP diluted earnings per share (EPS) of $0.71. This growth was primarily driven by a strong demand for Voxzogo, the only approved treatment for children with achondroplasia and the pharma giant’s established enzyme products.

Investors noted that BioMarin aims to maximize the revenue potential of its two key drugs, Voxzogo and Roctavian. Of the two names, Voxzogo, which is used for achondroplasia, saw a significant increase in new patients during the first quarter, with over 3,100 children being treated globally. This momentum is expected to continue, especially in the U.S., where younger patients are starting treatment. BioMarin is also enrolling patients in a pivotal trial to expand Voxzogo’s use for hypochondroplasia.

Meanwhile, Roctavian, a gene therapy for adults with hemophilia, faces reimbursement hurdles. However, BioMarin is actively working on improving market access in key regions. For instance, the first Italian patient received treatment in April, showcasing progress in expanding Roctavian’s reach.

So far in the year, BMRN stock has lost around 14%. Yet it is still trading at a lofty 47 times forward earnings. While recent Citi price target cuts have likely caused short-term stock price pressure, BMRN could still be an attractive option for investors seeking a stake in the promising gene therapy market. Interested readers could consider hitting the “buy” button, especially if shares go below $80.

Manhattan Associates (MANH)

Another company with a target price cut by Citi is the Manhattan Associates (NASDAQ:MANH) stock. The business develops supply chain and omnichannel commerce software for businesses to optimize operations easily, from warehouse to storefront. 

Management released first quarter financials in late April. Revenues were reported at $254.6 million, and the non-GAAP adjusted diluted EPS was $1.03 compared to $221.0 million and $0.80 for the year-ago quarter.  

Recently, Manhattan Associates was named a “Leader” in the Gartner Magic Quadrant for Transportation Management Systems for the sixth consecutive year. A few days later, the company was awarded the “Overall Innovation of the Year” by RetailTech Breakthrough. These recognitions highlight the company’s focus on developing cutting-edge supply chain solutions.

Year-to-date, MANH is down close to 4%, while the shares are changing hands at 55 times forward earnings. Interested readers may want to watch the $200 level or below as a better entry point.

Polaris (PII)

Up next on our roster of Citi price target cuts is Polaris (NYSE:PII), a prominent manufacturer in the recreational vehicles sector, such as motorcycles, ATVs and snowmobiles. The company operates across three key segments: Off Road, On Road and Marine.

Recently, Polaris released disappointing first-quarter financials. Revenues dropped 20% YOY to $1.7 billion, while adjusted diluted EPS plummeted 89% to $0.23, missing analysts’ expectations. Lower volume contributed to the sales decline, partly mitigated by a positive vehicle sales mix. Unfavorable weather conditions, particularly low snowfall, also impacted sales. The company reaffirmed a projected 5%-7% sales decrease for 2024 YOY.

Following the earnings release, Citi analysts revised their price target for PII stock downward from $100 to $96, maintaining a neutral rating. They remain cautious about the rest of the year, citing promotions weighing on the leisure industry.

So far in 2024, PII shares have lost around 12%, while the current dividend yield stands at 3%. The stock currently changes hands at relatively low valuations, with a forward price-to-earnings (P/E) ratio of 10.6x and a price-sales (P/S) ratio of 0.57x. Finally, a pullback toward $80 may signal a better entry point for contrarian investors.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.

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