A pundit at a prominent bank got notably less bullish on Snowflake (SNOW 3.69%) stock as the trading week kicked off, and the company's stock subsequently fell to close Monday 5.5% lower. While the day wasn't a particularly memorable one for stocks generally, Snowflake's decline was far sharper than the S&P 500 index's 0.1%.
Citi makes a deep cut
The person behind the move was Citigroup analyst Tyler Radke. Well before the market opened that day, he chopped his Snowflake price target by a hefty $50 per share for a new level of $290. This doesn't mean he's ready to throw in the towel on the stock, as he maintained his buy recommendation.
The reasoning behind Radke's cut wasn't immediately apparent. However, it isn't a major surprise. It came after a turbulent week for the cloud data warehousing specialist, in which it unveiled fourth-quarter results that convincingly beat analyst estimates, but featured current first-quarter guidance that didn't meet the consensus.
On top of that, Snowflake unexpectedly announced that its CEO, Frank Slootman, had retired. He's been replaced by Sridhar Ramaswamy, an internal hire and the ex-senior vice president of artificial intelligence (AI). The transition seems as if it was effected smoothly. Still, investors get spooked when a leader at a successful business drops out without sufficient -- or any -- warning.
More cuts, and even a pair of recommendation downgrades
Radke was hardly the only analyst getting more bearish on Snowflake. A clutch of other prognosticators made similar moves, with two banks, HSBC and Morgan Stanley, going so far as to downgrade their recommendations on the stock. The former reduced it to the equivalent of sell, and the latter to equal weight, or hold.
