Tuesday was a down day on Wall Street, but losses were relatively muted as investors tried to position themselves for some big news coming in the near future. The Federal Reserve began its two-day meeting on monetary policy, and most market participants expect the central bank to cut short-term interest rates on Wednesday. Yet not everyone thinks that'll be enough to keep the economy growing, especially if companies disappoint with their earnings results. Beyond Meat (NASDAQ:BYND), McDermott International (NYSE:MDR), and Pfizer (NYSE:PFE) were among the worst performers. Here's why they did so poorly.
Beyond Meat wilts
Shares of Beyond Meat dropped 12% following the plant-based protein maker's second-quarter earnings report. Fundamentally, the company seemed strong, as revenue nearly quadrupled from year-ago levels. Yet even though adjusted pre-tax operating earnings reversed a prior-year loss with a modest gain, Beyond Meat also announced a secondary stock offering, with current shareholders selling 3 million shares and the company adding another 250,000 shares to the mix. The big share-price decline still leaves Beyond Meat with an impressive gain since its IPO, with the stock staying at triple its opening day price.
McDermott runs out of gas
McDermott International's stock plummeted 35% after the engineering company released its second-quarter financial results. McDermott lost money unexpectedly, and it struggled to consolidate its acquisition of Chicago Bridge & Iron. On a positive note, backlog and new order figures were encouraging, and CEO David Dickson said that the order activity points to sustained growth for 2020. However, McDermott cut its guidance for 2019 due to weak operating results, scheduling issues, and a shift in some expected incentive awards. In order to recover fully, McDermott will need to see an even healthier energy industry drive up demand for its construction services in the sector.
Pfizer gets criticized
Finally, shares of Pfizer closed lower by 6.5%. The drugmaker made a big move on Monday when it announced plans to merge its Upjohn generic and off-patent drug portfolio with Mylan, but investors weren't entirely comfortable with the strategic decision. Today, stock analysts at Morgan Stanley weighed in, and they agreed that the move could be problematic. Morgan Stanley cut its rating on Pfizer from overweight to equal weight and slashed its price target by $8 per share to $40. With Upjohn expected to get separated from the rest of Pfizer through a spinoff, the remainder of the pharmaceutical giant's operations might not do as well as some think. Shareholders appear to believe that's a problematic factor for Pfizer going forward.