Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Peloton, Shopify, and Booking Holdings Stocks All Sank Today

By Rich Smith - Jan 4, 2021 at 3:40PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Analysts mostly move to support growth stocks with their ratings today, and mostly fail to do so.

What happened

Shares of home-exercise company Peloton Interactive ( PTON -2.43% ), e-commerce titan Shopify ( SHOP 1.28% ), and online travel agency Booking Holdings ( BKNG 5.34% ) all started off 2021 on a low note Monday. As of 2:20 p.m. EST today, all three stocks were down, with Peloton off 4.6%, Shopify 3.9%, and Booking Holdings 2.8%. And all probably for the same reason: Wall Street analysts.

3 colorful arrows all pointing down

Image source: Getty Images.

So what

In a rapid-fire series of stock initiations, Barclays came out today with an overweight rating on Peloton but only an equal-weight rating on Shopify.

Why would both stocks be down today despite these different ratings? Barclays set a $1,060 price target on Shopify stock, reports TheFly.com, but it closed last week just shy of $1,132 a share. So what looks like a pretty neutral hold rating is in fact a prediction that, 12 months from now, Shopify stock will have fallen more than 6%.

Similarly, Barclays says it thinks that Peloton shares are a buy, and yet it picked a price target of only $148 for them. For investors who exited 2020 holding Peloton shares worth nearly $152 each, that works out to a prediction of a 3% decline in price over the next 12 months. That's not what investors wanted to hear at all.

Now what

The situation with Booking Holdings is a bit different, and a whole lot less clear. So far today:

  • Bank of America has raised its price target on Booking Holdings to $2,285 per share.
  • Deutsche Bank boosted its price target to $2,585.
  • Loop Capital initiated coverage of the stock as a hold with a $2,029 price target.
  • And Barclays initiated coverage with an overweight rating and a $2,290 price target.

Booking Holdings stock closed at $2,227 last year, which means that three of these four analysts are bullish on it. Only Loop's rating and price target are actually downbeat. Even so, the stock is down today.

I can only surmise it's because investors are looking at the latest coronavirus numbers (with vaccinations proceeding much slower than initially predicted) and thinking that it may be longer than Wall Street thinks before people resume flying and booking hotels.

With Booking Holdings stock trading for 39 times what may be overly optimistic projections for 2021 growth, investors may be thinking now is the time to exit the stock -- before the numbers start looking even worse.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Booking Holdings Stock Quote
Booking Holdings
BKNG
$2,227.28 (5.34%) $112.84
Shopify Inc. Stock Quote
Shopify Inc.
SHOP
$1,428.12 (1.28%) $18.12
Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$42.49 (-2.43%) $-1.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.