Research Analysts’ Downgrades for December, 6th (ADRO, AL, ALB, DCI, EXC, GLW, GPI, IRCP, LNXSF, LRCDF)

Research Analysts’ downgrades for Thursday, December 6th:

Aduro BioTech (NASDAQ:ADRO) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Aduro's three distinct technology platforms are being utilized by several companies to develop treatments for several cancer indications. The company’s collaboration agreements with large pharma companies — Novartis and Johnson & Johnson — not only validate its research platforms but also enhance its financial position, providing it with adequate funds. However, with no approved products in Aduro’s portfolio, the company heavily depends on funds generated from collaboration and license agreements, government grants as well as other payments for the development of its pipeline candidates. Thus, an inability to secure sufficient funding could hinder Aduro’s pipeline progress. Shares of the company have underperformed the industry so far this year.”

Air Lease (NYSE:AL) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Air Lease  is being aided by strong passenger traffic causing an increase in demand for planes. With the overall economy remaining buoyant, passenger traffic has been bumping up. The company has been reaping benefits of the new tax law ever since its implementation. Moreover, efforts to expand the company’s fleet encourage us. Air Lease's measures to reward shareholders in the form of dividend payments is also encouraging. The company's board recently raised the quarterly cash dividend by 30% from 10 cents per share to 13 cents. However, rising operating expenses pose a challenge and might limit bottom line growth in the fourth quarter. We are also concerned about Air Lease's high debt levels. The company's delivery delays, arising from global supply chain and production constraints due to engine issues, are also concerning. In fact, shares of the company have underperfomed its industry in the past six months.”



Albemarle (NYSE:ALB) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Albemarle remains focused on strengthening its lithium business. It is well placed to leverage strong growth in the battery-grade lithium market. The company should also gain from the synergies of Rockwood Holdings acquisition. Further, Albemarle is divesting non-core assets to boost growth opportunities and focus on its key businesses. The company also remains committed to deliver incremental returns to shareholders. However, Albemarle is facing headwinds associated with higher expected tax rate in 2018 and challenges in bromine and catalysts units. Moreover, a significant rise in capital spending is expected to hurt its free cash flows this year. Albemarle has also underperformed the industry it belongs to over a year.”

Donaldson (NYSE:DCI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “In first-quarter fiscal 2019, Donaldson's earnings and revenues grew 21.7% and 8.8%, respectively. Over the past six months, the company's shares have outperformed the industry.The company perceives that stronger top-line performance, as well as ongoing price realization and cost reduction moves will likely continue to boost up its profitability in the quarters ahead. Moreover, new innovation investments and increased capital expenditure projects will likely aid in boosting up its revenues and profitability going forward.However, over the past six-month period the stock looks overvalued compared to its industry. Also, material price inflation and soaring freight charges is predicted to weigh over Donaldson's near-term margins. Weakening Gas Turbine Systems business also remains a major cause of concern for the company. In the past 7 days, earnings estimates on the stock improved for fiscal 2019 and remained stable for fiscal 2020.”

Exelon (NYSE:EXC) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “In the past 12 months, shares of Exelon Corporation have gained against a decline of the industry it belongs to. Exelon is going to benefit from its $21 billion planned capital investment, focus on zero emission electricity generation and cost savings. The company continues with its hedging program to manage market risks and protect the value of its generation. Strong cash flow generation capacity will help it lower debt levels and increase value of its shareholders. However, Exelon is subject to the impact of commodity price volatility and price fluctuation in the wholesale markets. Stringent government regulation is also a cause of concern.”

Corning (NYSE:GLW) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Solid demand for Gorilla Glass 5 and other fiber optic products remain key catalyst as Corning continues to innovate in the glass substrate industry. The company has several products focusing on datacenter with a portfolio consisting of optical fiber, hardware, cable and connectors that helps it to create optical solutions to meet varying consumer needs. Management’s aim to return value to shareholders through regular share repurchases and dividends is encouraging. The stock has outperformed the industry in the past six months on an average. However, the ongoing trade war between the United States and China remain a strong impediment to top-line growth. The company faces price erosion at the rate of 1-2% per quarter in the Display segment. We expect prices to remain a drag on margins. Another concern with respect to the TV market in particular is the concentration of market share in the hands of a few large players.”

Group 1 Automotive (NYSE:GPI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Group 1 Automotive regularly opens new dealerships besides acquiring exiting ones. Last month, it opened three dealerships, of which two is in Texas and one in Brazil. Year to date, Group 1 acquired a total of 14 dealerships, with expected annual revenues of $530 million. It regularly acquires and divests dealerships and franchises to expand its business footprint. Further, the company’s higher cash balance allows it to frequently engage in capital deployment strategies, which include share buybacks and dividend payments. However, declining new vehicle sales in U.K. partly due to new emission tests are concerns for the company. Also, foreign currency vulnerability is a concern for the company. Over the past three months, shares of Group 1 Automotive company have underperformed the industry it belongs to.”

IRSA Propiedades Comerciales (NASDAQ:IRCP) was downgraded by analysts at Santander from a hold rating to an underperform rating.

Lanxess (OTCMKTS:LNXSF) was downgraded by analysts at UBS Group AG from a buy rating to a neutral rating.

Laurentian Bank of Canada (OTCMKTS:LRCDF) was downgraded by analysts at Canaccord Genuity to a sell rating.

Paylocity (NASDAQ:PCTY) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Paylocity is hurt by decline in Implementation services and other revenues. Paylocity’s SaaS network infrastructure is a crucial part of its business operations which is prone to cyber threats and security breaches. These disruptions may lead to increased customer dissatisfaction. Also, competition in the payroll processing sector from new entrants as well as existing players remains a concern. However, the company is benefiting from client wins and a rise in ARPU from clients adopting new products. For the last few quarters, clients moving from traditional payroll service providers to the company’s SaaS based services contributed significantly to its revenues. Shares have outperformed the industry in the year-to-date period.”

Sirius XM (NASDAQ:SIRI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Sirius XM's self-pay subscriber base and new subscriber base are witnessing growth due to strong content portfolio. Additionally, Sirius XM’s partnership with Amazon to provide free access to a few of its subscription packages for existing Echo holders is expected to further boost its subscriber base and their engagement levels. Post Pandora’s acquisition, Sirius XM’s 36 million subscribers across North America and Pandora’s 71.4 million monthly active users (MAUs) together will lead to the creation of the world’s largest audio entertainment company. Moreover, the raised full-year guidance for self-pay subscriber additions, revenues and adjusted EBITDA bodes well. Notably, shares have outperformed the industry on a year-to-date basis. However, increasing royalty related expense is expected to keep margins under pressure. Slowdown in auto sales is also a concern.”

Southern (NYSE:SO) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Southern Company is one of the largest and best-managed electric utility holding companies in the United States, dominating the power business across the southeastern region. With good rate base growth and constructive regulation, it is expected to generate steady earnings and dividend growth in the coming years through long-term power contracts. Additionally, SO's $12 billion AGL Resources buy has significantly increased its customer base and diversified offerings. However, continued timing and cost overrun issues over two large construction projects – Vogtle and Kemper – are major overhangs. While the $25 billion Vogtle nuclear plant has gone well over budget and is years behind schedule, Southern's Kemper project suffered yet another setback with the suspension of all coal gasification operations amid additional cost burden. Hence, Southern Company warrants a cautious stance from the investors. “

Sprague Resources (NYSE:SRLP) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Sprague Resources LP operates as suppliers of energy and materials handling services. The Company stores, distributes, and sells refined petroleum products and natural gas. Its products include home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague Resources LP is based in Portsmouth, New Hampshire. “

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