OLPX - Olaplex stock slides further as downgrades follow earnings disappointment

Olaplex Holdings ( NASDAQ: OLPX ) extended its decline on Wednesday after Goldman cut its rating to Neutral.

Shares had slipped over 9% on Tuesday after posting a mixed Q4 report and signaling weak 2023 demand trends . On Wednesday, the stock slid a further 8.13% as analysts assessed the sales deterioration.

“Now demand has gone from slower but still-strong double-digit growth in 4Q to outright declines with recent demand indicators leading the company to believe demand will contract in the low-to-high 20% range in 1Q, led by its influential salon channel,” Goldman Sachs analyst Jason English advised. “The rapid erosion is surprising and follows escalating social and traditional media reports of negative side effects of the product.”

While he noted that management is combating the reports of side effects, these efforts are likely to be costly and success in the arena of public opinion remains uncertain. As such he downgraded the stock to Neutral from Buy and lowered his price target to $6 from $8.

Read more on the Seeking Alpha Quant team’s warning on the stock issued ahead of the results . The team has held a Sell rating on the name since October 12, 2022 .

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