Published on 20 Oct 2023 on Benzinga
Analysts downgrade a stock for several reasons. The stock may have risen so much in recent weeks that the analyst feels the stock is no longer a good value relative to its price, or the analyst feels a company is unlikely to perform well in the coming months. This could be because of increased competition, a decline in its products or services, a perceived downturn in the general economy or the resignation of a longstanding company insider.
Whatever the reasons, investors holding positions in downgraded stocks hate to see their shares fall after the downgrade. But it happens often.