Investment Analysts’ Downgrades for November, 14th (AKG, BURL, CENX, CNA, CSIQ, CVX, CWCO, GPN, GPS, HAE)

Investment Analysts’ downgrades for Tuesday, November 14th:

Asanko Gold (TSE:AKG) (NYSEMKT:AKG) was downgraded by analysts at Raymond James Financial, Inc. from an outperform rating to a market perform rating. They currently have C$3.00 price target on the stock, down from their previous price target of C$3.50.

Burlington Stores (NYSE:BURL) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “In an intensely competitive retail landscape, Burlington Stores has made multiple changes to its business model to adapt to the ongoing changes in the industry. The strategic initiatives have aided the company to continue register growth in both the top and bottom lines, which in turn has helped the stock to outpace the industry in a year. Management is confident about posting year-over-year increase in both the top and bottom lines in fiscal 2017. The company now envisions adjusted earnings in the range of $4.11-$4.18 per share up from $3.24 reported in the prior year. Notably, over the years the company has increased vendor counts, made technological advancements, initiated better marketing approach and focused on localized assortments. These along with effective inventory management and cost containment efforts have helped elevate gross margin. Of late, estimates have increased ahead of the third quarter results.”

Century Aluminum (NASDAQ:CENX) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Century Aluminum swung to a profit in third-quarter 2017. Adjusted earnings, however, missed the Zacks Consensus Estimate, while sales topped. High levels of production from China is still hurting the aluminum industry. The company also faces a difficult pricing environment and is seeing high costs for power and certain key raw materials. “

CNA Financial Corporation (NYSE:CNA) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Shares of CNA Financial have outperformed the industry year to date. Being one of the versatile property and casualty (P&C) insurers, CNA Financial has been maintaining a good track record of combined ratio over the past few years, thereby leading to underwriting profitability. Moreover, with the rising interest rate environment, the company has been displaying improving investment results over a considerable period of time. The company also remains committed in enhancing shareholders value via effective capital deployment. Its long-term care business continues to perform strongly. However, exposure to catastrophe losses poses an inherent risk to the P&C business, thus rendering volatility to the company’s earnings. With respect to quarterly results, CNA Financial’s third-quarter 2017 earnings outperformed the Zacks Consensus Estimate but deteriorated year over year on significantly higher catastrophe losses.”

Canadian Solar (NASDAQ:CSIQ) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Canadian Solar’s third-quarter 2017 earnings came in line with the Zacks Consensus Estimate, but declined year-over-year. Meanwhile, revenues surpassed the consensus mark and improved year over year. The company also increased its earnings guidance for 2017. Notably, Canadian Solar caters to a geographically diverse customer base spread across both key markets and emerging markets. Therefore, it  is gradually gaining share in Asia, which could soon become a major solar market. Its strong pipeline of projects along with pertinent inorganic strategies will further consolidate its position. However, the company is expected to continue experiencing market dislocation in the near term, which might directly impact its 2017 financial performance. Stiff competition from cheaper alternatives and exposure to foreign exchange risks are added concerns. Shares of Canadian Solar also underperformed the broader industry in the last year.”

Chevron Corporation (NYSE:CVX) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “The second-largest U.S. oil producer beat Q3 expectations amid the recovery in commodity prices and robust refining profits. More importantly, Chevron was able to cover its investment and payouts with cash from operations – something investors really want right now. With crude prices firming and Chevron being one of the most oilweighted majors, the company's profits got an expected boost. Stronger refining margins also helped increase earnings. As it is, its current oil and gas development project pipeline is among the best in the industry, boasting large, multi-year projects. However, we remain worried over signs of headwind in Chevron's U.S. production. Chevron's exposure to production in the vulnerable and violence-prone regions in Nigeria poses additional risk. Hence, we advise investors to wait for a better entry point before buying shares in the oil major.”

Consolidated Water Co. (NASDAQ:CWCO) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Consolidated Water’s shares have gained lower than the industry in the last 12 months. Its earnings per share in the third quarter were lower than the Zacks Consensus Estimate. Hurricane Irma has affected operations of the company’s water treatment plants but its impact was minimal in the reported quarter. In addition, risk of losing major customer accounts or failure to renew long term contracts with major customers as well as foreign exchange fluctuation are other headwinds for the company. Consolidated Water Co. is presently utilizing the most advanced technology to convert seawater to potable water. Apart from expanding organically, the company is also working to broaden its operation through strategic acquisition.”

Global Payments (NYSE:GPN) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Global Payments' shares have outperformed its industry year to date. The company’s investment in future growth, efforts to progress with the Heartland integration and successful refinancing of its credit facilities bode well for the long term. The company is witnessing sustained growth in business from Europe, Asia Pacific and North America. Global Payments earnings beat the Zacks Consensus Estimate and improved 29% year over year. Better-than-expected earnings were backed by higher revenues across its marketsFollowing the company’s strong third-quarter earnings, Heartland integration as well as the recent refinancing, the company raised its projections for 2017. Nevertheless, the company suffers from high debt and exposure to currency volatility.”

Gap, Inc. (The) (NYSE:GPS) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Though Gap’s new growth strategy focused on growing its Old Navy and Athleta brands looks promising, results continue to be soft at its namesake and Banana Republic brands. Moreover, going forward it expects SG&A costs to increase at a higher rate than the first half. This mainly stems from increased product, marketing and digital investments for the significant back-to-school selling season. The company expects the rise in costs to hurt its bottom line. Additionally, the company expects currency headwinds to persist in fiscal 2017, which in turn might dent the quarterly results. Nonetheless, Gap’s shares have outpaced the industry in the last three months, driven by its solid focus on enhancing product quality and responsiveness to changing consumer trends. The company has been making constant efforts to boost its digital and mobile offerings, alongside improving product acceptance. Estimates have been going down lately.”

Haemonetics Corporation (NYSE:HAE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Haemonetics exited second-quarter fiscal 2018 on a promising note, with earnings and revenues beating the Zacks Consensus Estimate. The company also witnessed year-over-year growth in both the counts. Continued expansion in newer geographies has helped the company deliver strong results in the recent past. Meanwhile, the company’s strong cash position boosts investors’ confidence. The company is also optimistic about strong market adoption of its NexSys PCS plasmapheresis system which recently received FDA approval. Further, the raised fiscal 2018 adjusted earnings guidance is encouraging. Over the last month, Haemonetics has been trading above the broader industry. However, we are disappointed with the fact that despite the encouraging growth in the Plasma and Hospitals, the company’s sluggish Blood Center business moderated overall growth in the reported quarter. Also, contraction in gross and operating margin is discouraging.”

Johnson Controls International PLC (NYSE:JCI) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Johnson Controls’ adjusted earnings and revenues came in line with the Zacks Consensus Estimate in the fourth-quarter of fiscal 2017. The frequent business divestitures are adversely impacting its revenues and profits. The company has agreed to pay $14.4 million to settle U.S. regulatory charges for its violation of the Foreign Corrupt Practices Act, which will add to its expenses. Also, negative foreign currency translations and volatile commodity prices are few other headwinds the company is facing. Moreover, in the last six months, Johnson Controls’ shares have underperformed in the industry it belongs to.”

Nordstrom (NYSE:JWN) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Nordstrom has underperformed the industry in the last three months. Though the company’s growth strategy bodes well, investments toward occupancy, technology, supply chain and marketing are likely to weigh upon its cost and margin performance. The company’s merchandise margin was hurt by higher occupancy expenses related to new Rack and Canada stores in the fiscal third quarter, leading to lower gross margin. Moreover, SG&A expenses increased in the quarter due to higher technology and supply chain expenses. Additionally, the company expects these hurdles to continue hurting results in fiscal 2017. However, third-quarter fiscal 2017 marked sixth straight quarter of earnings beat, while sales topped estimates for the second consecutive quarter. Results gained from the smooth execution of customer strategy along with disciplined inventory and expense management. Sales growth in Nordstrom Rack and solid e-commerce sales also aided results.”

lululemon athletica inc. (NASDAQ:LULU) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Lululemon has surpassed the industry in the past three months, mainly driven by its focus on strategy for 2020, as part of which it aims to generate revenues of $4 billion. To achieve this, the company is committed toward product innovation, building store fleet in North America, expanding digital business and global expansion. All these factors helped Lululemon to post robust numbers in second-quarter fiscal 2017, even amid a tough retail landscape. Both sales and earnings topped estimates and grew year over year. While the bottom line marked its 2nd consecutive beat, the top line recorded its 7th straight quarter of positive surprise. Also, sturdy e-Commerce growth fueled comps. Apart from this, the company is on track with ivivva’s remodeling. The solid results and favorable third quarter trends encouraged management to raise its fiscal 2017 view. However, stiff competition and volatile consumer spending patterns may pose concerns.”

Microsemi Corporation (NASDAQ:MSCC) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Microsemi Corporation is an OEM of a broad range of high-reliability and analog/mixed signal integrated circuits. Fourth-quarter fiscal 2017 non-GAAP earnings beat the Zacks Consensus Estimate. The company's focus on improving product mix, operational efficiency, and consolidation are driving revenues and margins through 2017. Moreover, we have confidence in the company's strategic positioning, strong fundamentals and growth prospects. Microsemi's scope for margin expansion and decent balance sheet are the other positives. However, pockets of weakness related to product transition at medical customers, push-out of some communications spending in China and a softer oil & gas market continue to impact revenues. Year to date, the stock has underperformed the industry it belongs to.”

Square (NYSE:SQ) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Square has outperformed the industry on a year-to-date basis. The company’s comprehensive commerce ecosystem, accelerated business growth and focus on integration, automation, and platform are key catalysts. The company's plan to open a wholly-owned brick-and-mortar bank is positive in our view. Meanwhile, automation is enabling the company to increase reach of financial system to more people, scale up its own operations and help sellers with advanced CRM tools. Moreover, the company displays consistent business growth through balancing investment and margin expansion. However, it’s currently a loss making enterprise, which doesn't augur with investors. Moreover, vulnerability to intense competition and changing technology, industry standards and seller and buyer needs pose signficant challenges.”

United States Cellular Corporation (NYSE:USM) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “U.S. Cellular posted mixed third-quarter 2017 results with massive subscriber gain. We believe the company’s succeeded in subscriber additions and churn management on the back of numerous strategic moves like introduction of a new billing system, continuous rollout of 4G LTE, enhancement of LTE handsets, completion of various spectrum transactions and monetization of non-strategic assets, to achieve its target. U.S. Cellular is optimistic about the growing demand for smartphones, which enjoy significant market penetration, supporting growth in data revenues. However, we remain concerned about the company’s operation in an intensely competitive and consolidated wireless market. Costs associated with network integration and construction of cell sites, aggressive pricing by larger rivals and fall in service revenues are other major risks. Over the past three months, the stock price underperformed its industry's loss.”

ViaSat (NASDAQ:VSAT) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “ViaSat’s second-quarter fiscal 2018 adjusted earnings beat the Zacks Consensus Estimate by a whopping 250% but fell year over year, hurt by escalating research and development costs, and costs related to the ViaSat-2 service launch activities. High R&D and ramp-up costs remain a major headwind to the company’s margins in the near term. The company recorded terrific growth in government business, which was somewhat offset by contraction in Commercial Networks revenues. Steady growth in in-flight connectivity services, mobile broadband, consumer ARPU gains and cost-reduction initiatives proved conducive to growth. ViaSat shares have outperformed the industry’s average return as well, over the past six months. However, persistent weakness in the Commercial Networks segment, seasonality of demand, strong competition and huge rise in R&D expenses continue to be overhangs for the company’s profitability.”

China Rapid Finance Limited Sponsored ADR (NYSE:XRF) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “China Rapid Finance Limited provides investment management solutions and financial advisory services. It operates an integrated online platform which offers risk decision management system, marketing planning system, overdue debts collection system and accounting service system. China Rapid Finance Limited is headquartered in Shanghai, China. “

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