Investors were pleased to see the stock market regain some ground late Friday from the worst of its intraday declines. However, Wall Street still seems a little bit concerned about the prospects for the high-growth stocks that dominate the Nasdaq Composite (^IXIC -0.52%). As of 11:45 a.m. ET, the Nasdaq was up 1%, but that trailed gains in the broader market.
Making news today were a couple of companies with Nasdaq listings that drew the attention of professional stock analysts. Autodesk (ADSK -2.00%) shares were down sharply, but shares of Saia (SAIA -3.47%) posted modest gains following Wall Street comments. Below, you'll see more of what analysts were saying about the companies and how their businesses look.
Autodesk deals with downbeat comments
Autodesk shares were down more than 8% in midmorning trading on Monday. The maker of computer-aided design (CAD) and other software tools for architects, engineers, and other creative professionals drew negative comments from stock analysts as it prepares to release its latest quarterly financial results later this week.
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Analysts at Deutsche Bank downgraded their rating on Autodesk from buy to hold. They also cut their price target on the stock by $50 per share, setting a new level of $225. The analysts based their move on things that they've heard from Autodesk's partner channels that suggest that the environment for subscription-based software is shifting. With some customers opting not to enter into long-term contracts, Deutsche Bank expects first-quarter financial results could end up being less than stellar. That might in turn point to a weaker outlook for the full year.
The big question for Autodesk is whether a recession is likely. Professional demand for Autodesk's products is somewhat cyclical, so a downturn could come at a bad time for the software company.
Autodesk has already seen its stock fall by half from its recent highs, so some investors are looking at the current valuation as being more attractive than ever. Yet that doesn't mean that Autodesk might not see its stock drop further following its earnings results, as many of its peers have suffered share-price declines even after encouraging financial performance.
Saia keeps on trucking
Elsewhere, shares of Saia were up nearly 2%. The less-than-truckload shipping specialist earned some favorable comments from stock analysts amid a challenging environment for the logistics industry.
Analysts at UBS upgraded Saia from neutral to buy. The company also set a new price target on Saia stock of $240 per share, up $27 from its previous target. UBS acknowledged that 2022 is likely to be a tough year for Saia and the rest of the trucking industry, with high fuel prices weighing on profitability. However, the analysts believe that the longer-term growth strategy Saia has in place remains strong. With the stock already having lost close to half of its value since late 2021, UBS believes Saia's valuation gives it a favorable risk-reward profile.
That's not to say that things look clear from here. Trucking stocks broadly face labor shortages and wage pressures, and that's adding to higher fuel costs in eating into profit margins. Saia is far smaller than the leaders in its industry, and while that makes the smaller company nimbler to react to changing conditions, Saia lacks the scale to last through conditions that larger rivals can endure more easily.
A lot of stocks are on sale, but that doesn't make them all great buy candidates. Saia could do well in the long run, but the challenges it faces are very real.
