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Investing.com -- JP Morgan downgraded shares of Frontdoor (NASDAQ:FTDR) Inc, Resideo Technologies (NYSE:REZI) Inc, and Ziff Davis Inc, citing mounting tariff-related headwinds and a weaker macroeconomic outlook that could pressure revenue and margins across the group.
Ahead of first-quarter earnings, the bank cut estimates and price targets for much of its coverage, with Frontdoor, Resideo and Ziff Davis seeing the most significant revisions.
“None of our companies are immune to a weaker macro environment,” JP Morgan said referring to internet SMIDs, adding that while direct tariff exposure is limited it was reducing estimates, multiples, and price targets across the board.
Frontdoor was downgraded to Neutral with a $40 price target.
The company faces margin pressure from a 25% tariff on steel and aluminum, and JP Morgan now expects no growth in its direct-to-consumer business in 2025.
The firm also lowered its 2026 margin forecast, citing the difficulty of offsetting tariff costs in a sluggish macro backdrop.
Resideo also downgraded to Neutral with a $16 target, is seen as most exposed to both tariff and housing market risks.
JP Morgan noted that 50% of its products are manufactured in Mexico or China, and that its 2025 outlook assumes “flat to slight industry growth,” which now appears too optimistic.
ZD was downgraded to Neutral with a $33 target. Brokerage flagged softening advertising revenue and macro pressure on subscriptions.
While recent acquisitions may offer some support, the firm said near-term catalysts for multiple expansion are lacking.
JP Morgan’s broader caution reflects cuts of 1& to 5% to 2025 -26 revenue estimates and 1% to 10% to EBITDA across its coverage.
Despite the downgrades, the firm remains bullish on names like Roblox, AppLovin (NASDAQ:APP), and Take-Two (NASDAQ:TTWO) into earnings.