On the second-to-last trading day of the week, investors weren't willing to go on offense with defense stock Leonardo DRS (DRS 6.19%). On the back of two bearish post-earnings adjustments by analysts, its shares were sliding by almost 6% in late-session action. That was a notably steeper drop than the S&P 500 index's 0.6% decline at that point.
A day of drops
This came one day after Leonardo DRS released its third-quarter earnings, and that wasn't a coincidence. A pair of pundits tracking the company's fortunes weighed in with price target cuts in their reevaluations of its potential.
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Both Morgan Stanley's Kristine Liwag and Truist Securities's Michael Ciarmoli got out the scissors on Thursday.
Each snipped $2 from their previous price target for a new level of $45 per share for Liwag and $47 for Ciarmoli. The two pundits continued to differ on the stock's attractiveness, however, with Liwag maintaining her hold recommendation and Ciarmoli standing firm on his buy.
NASDAQ: DRS
Key Data Points
Lofty expectations
It wasn't immediately apparent why the two analysts clipped their price targets, but the reaction mirrors that of the broader market on Wednesday -- the day Leonardo DRS's released those quarterly numbers.
Although the company is benefiting from beefed-up defense spending globally and beat on the consensus revenue and earnings numbers, it feels like investors were expecting even more of a blowout quarter. The bar has been raised high for defense stocks lately, after all.
