BAC - Why Sonos Stock Wasn't Music to Investors' Ears Today
2023-11-07 18:16:52 ET
Audio equipment specialist Sonos (NASDAQ: SONO) wasn't producing sweet songs on Tuesday -- at least as far as its stock was concerned. The company's shares were dinged by almost 5% on the back of an analyst recommendation downgrade. That decline was in contrast to the performance of the S&P 500 index, which closed the day marginally (0.3%) higher.
The person effecting the downgrade was John Babcock of Bank of America (NYSE: BAC) Securities. Well before market open, Babcock shifted his recommendation down one peg to neutral from the preceding buy. He accompanied this with a price target reduction, pushing his fair value estimation for Sonos stock down to $12 per share; formerly, this stood at $20.
In a new research note, the prognosticator spelled out the reasons for his move. He expressed concern about the "continued softness" in the consumer electronics market, sluggish turnover in the housing market, and the lengthy replacement cycle of the home audio products Sonos specializes in providing. A more company-specific factor he cited was Sonos's "elevated" inventory and promotional activities.
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Why Sonos Stock Wasn't Music to Investors' Ears Today