Morgan Stanley lowered its rating on Allbirds ( NASDAQ: BIRD ) to Equal-weight from Overweight after warning about the impact of a macroeconomic deterioration.
The firm said BIRD's Q2 results confirmed that the macro backdrop is impacting BIRD's results and industry-specific data points are working against it.
Analyst Alex Straton: "Higher macroeconomic uncertainty limits both near & medium-term visibility, & in our view makes for limited room for upward earnings revisions (even on lower levels), the #1 driver of stock price in our space. Additionally, this macroeconomic worsening & BIRD’s subsequent revenue growth slowdown further clouds the business’ path to profitability."
Straton and team think the stock could remain range-bound until the path to profitability is more clear.
Morgan Stanley lowered its price target on BIRD to $5.
Shares of Allbirds ( BIRD ) fell sharply on Tuesday after the retailer slashed full-year guidance and cut its workforce. BIRD was down 1.31% in premarket trading on Wednesday to $4.52.
Read the Allbirds earnings call transcript.
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Allbirds is cut at Morgan Stanley with profitability timeline pushed back