Cognex ( NASDAQ: CGNX ) shares slipped on Friday as investment firm J.P. Morgan downgraded the manufacturer of machine systems and software, citing "softening demand" in its second-quarter and high customer concentration from Amazon ( AMZN ) and Apple ( AAPL ).
Analyst Paul Chung lowered his rating on Cognex ( CGNX ) to underweight from neutral, but kept the firm's $40 price target, noting that a "pause" in logistics spending is worrisome, especially from Amazon ( AMZN ).
"Customer concentration risk remains elevated at Amazon and Apple, and given pause in logistics spending at Amazon which drove $300mm in revenues [fiscal 2021] ~up 65% [year-over-year], we sense we may see multiple years of digestion," Chung wrote in a note to clients.
Cognex ( CGNX ) shares fell almost 2% to $47.61 in premarket trading.
Chung also noted that consensus estimates for the fourth-quarter may be "a bit high," citing issues such as softening logistics demand, foreign exchange headwinds, component inflation and destroyed inventory at a key partner, in addition to "limited guidance" given by the company.
Earlier this month, Cognex ( CGNX ) slumped badly after it missed second-quarter estimates and issued a third-quarter outlook that was well below expectations .
Analysts are extremely varied on Cognex ( CGNX ). It had an average rating of HOLD from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates CGNX a STRONG SELL .
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Cognex slips as J.P. Morgan downgrades citing 'softening demand' seen in Q2