S&P 500: Analysts Aggressively Slash Price Targets On 10 Stocks

Analysts are usually pretty bullish on most S&P 500 stocks. So now that they’re pulling back on some of them, it’s worth listening.


In just a month, Wall Street analysts cut their 12-month price targets by more than 10{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} on 10 S&P 500 stocks including Carnival (CCL), Micron Technology (MU) and Nike (NKE), says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That’s about as strong of a signal of caution as you’ll get from analysts.

Why all the big cuts now, after the S&P 500 already dropped into a bear market? It’s all about fear that the upcoming second-quarter earnings reporting season might be rougher than many thought earlier. “Second quarter corporate profits will struggle given inflation has run much hotter than anyone expected,” said Edward Moya, strategist at Oanda.

Analysts Starting To Cut Targets

S&P 500 price targets for stocks in the next 12 months are coming down fast.

Analysts have cut their price targets on nearly 80{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of S&P 500 stocks in just the past month. And of those, the average cut is more than 3{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73}.

Even “safe haven” stocks like big technology firms such as Apple (AAPL) and Microsoft (MSFT) are getting dragged in, too. Following price target cuts on Monday, analysts have taken their 12-month price target on Apple down more than 2{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} to 183.95 in just a month. And over at Microsoft, analysts lowered their 12 month price target by 1.8{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} to 353.34.

But these statistics mask the rising number of large price cuts. Analysts slashed their price targets by 10{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} or more than two dozen stocks in the S&P 500. And those are where analysts’ outlooks are darkening the fastest.

Biggest Price Target Cuts In The S&P 500

When looking for stocks where price targets are dropping like an anchor, cruise ship operator Carnival is at the front.

Analysts took down their 12-month price target on the stock by more than 28{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} in just a month to 16.43 a share. Earnings are certainly an issue. Wall Street thinks Carnival will lose $3.60 a share in 2022. That’s better than the $7.06 it lost in 2021, but still a sea of red ink. And that’s assuming there aren’t major new disruptions to voyages due to any new Covid-19 outbreaks. With that said, if analysts are right, their price target represents nearly 94{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} upside from the stock’s price now.

Another more puzzling downgrade in price targets is happening at computer-chip maker Micron. Analysts slashed their 12-month price target by nearly 25{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} in just a month’s time. It’s surprising due to reports that computer chips are still in scarce supply. Meanwhile, analysts think Micron’s adjusted earnings per share will rise more than 40{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} this year. If analysts’ crystal balls are right, it would mean the stock will be worth upward of 41{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} more in 12 months than it is now.

Worries Heat Up On The S&P 500’s Future

But again, it’s all about profit. Inflation and supply-chain snarls convinced analysts business isn’t so hot right now. That’s not just a theory with Nike. Analysts took down the company’s price target by nearly 13{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73}. Sparking the negativity was the company’s quarterly profit reported on June 27. The quarter’s bottom-line results actually topped views by 23{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73}. But analysts now think the sneaker maker’s adjusted profit will fall more than 10{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} in the current fiscal year ended on May 31, 2023.

Are analysts lowering their price targets on S&P 500 stocks too late? Perhaps. But their caution is another reminder why you should make sure you buy at the right time.

Biggest S&P 500 Target Price Cuts

 Analysts lowered their 12-month price targets the most on these stocks in the past month

Company Symbol PT change one month Sector
Carnival (CCL) -28.7{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} Consumer Discretionary
Micron Technology (MU) -24.6 Information Technology
Adobe (ADBE) -16.4 Information Technology
Lennar (LEN) -15.6 Consumer Discretionary
Interpublic Group (IPG) -13.7 Communication Services
Nike (NKE) -12.5 Consumer Discretionary
Accenture (ACN) -12.4 Information Technology
Omnicom Group (OMC) -12.4 Communication Services
BlackRock (BLK) -11.5 Financials
NVR (NVR) -11.2 Consumer Discretionary
Follow Matt Krantz on Twitter @mattkrantz


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