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Wednesday, Kepler Cheuvreux revised its stance on Forsee Power SACA (FORSE:FP), downgrading the stock from Buy to Hold and significantly reducing the price target from EUR1.10 to EUR0.57. The adjustment by the research firm reflects concerns over the company’s withdrawal of its FY 2025 guidance amidst heightened macroeconomic uncertainty and increased competition from Asian manufacturers.
The firm’s analyst, Auguste Deryckx, provided insight into the rationale behind the downgrade, citing the challenging conditions that may compel Forsee Power to consider a capital increase. Kepler Cheuvreux also tempered its sales forecast for the company by approximately 10% for FY 2025. Contributing to the revised outlook, the analyst indicated an increase in the Weighted Average Cost of Capital (WACC) for Forsee Power, from 12.9% to 13.9%.
The lowered price target represents a 48% decrease from the previous projection, indicating a more conservative valuation of Forsee Power’s stock. The research firm’s analysis suggests that the potential for stock appreciation is limited and that there are currently no evident positive catalysts that could drive the stock’s performance in the near term.
Forsee Power’s recent announcement to withdraw its FY 2025 guidance has been attributed to the current adverse economic environment and the competitive pressures from Asian companies in the market. This strategic shift appears to have prompted Kepler Cheuvreux to reassess the company’s financial outlook and stock valuation.
Investors are now faced with a revised perspective on Forsee Power’s potential growth and financial stability, as the company navigates through the uncertainties and competitive challenges in its industry. The new hold rating indicates a neutral expectation for the stock’s performance, suggesting that investors may wish to maintain their current positions without increasing their holdings.
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