It’s bad enough when you own a stock that absolutely flops and gets killed after missing an earnings number, giving poor forward guidance or, even worse, both. What really adds insult to injury is when Wall Street analysts, many of whom were cheerleaders and pounded the table on the stock, suddenly reverse course and cut the stock to a hold or even a sell.
Last week was a very tough week for some very high-profile stocks, and many analysts on Wall Street did just what was described above. Analysts at one firm we cover here at 24/7 Wall Street, Stifel, held their ground on some companies that were murdered, and while lowering their price targets, they stay with their rating of Buy.
This high-profile tech stock was absolutely taken apart on Friday, after being a momentum trader’s dream for a few years. LinkedIn Corp. (NASDAQ: LNKD) operates an online professional network worldwide. The company, through its proprietary platform, allows members to create, manage and share their professional identity online; build and engage with their professional networks; access shared knowledge and insights; and find business opportunities.
The company also offers LinkedIn mobile applications across a range of platforms and languages, including iOS for iPhone and iPad, Android, BlackBerry, Nokia Asha and Windows Mobile, as well as a public website that allows developers to integrate its content and services into their applications.
While the company posted adequate fourth-quarter results, but the guidance they offered was far below Wall Street estimates and the stock was crushed on Friday — to the tune of almost 44%. The Stifel analysts hold their ground, and while acknowledging that the sell-off is painful, they remind investors that the company is notorious for giving very conservative guidance. They feel that the wash-out in the shares does give investors a solid opportunity for the balance of 2016 and that LinkedIn is narrowing its focus on high-value, high-impact initiatives and jettisoning other investments that do not provide acceptable returns.
The Stifel price target for stock falls to $220 from $270, and the current Thomson/First Call consensus estimate is $196.48. Shares closed battered and bruised on Friday at $108.38.