Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of auto market supplier Meritor Inc (NYSE:MTOR) dropped as much as 11% today after being downgraded by an analyst.
So what: Barclays lowered their rating for Meritor from overweight to equal weight and lowered their price target from $17 to $15. Ironically, this comes as JPMorgan Chase and Citigroup recently raised their price targets slightly to $16.50 and $16, respectively.
Now what: Analyst ratings can often move a stock for a short amount of time but long-term they don't change the fundamentals of a company. Worse yet, analysts have a terrible track record against the market and often have incentives that aren't aligned with long-term shareholders. In short, I wouldn't change my investment thesis because of this downgrade and would even see it as a buying opportunity because I don't think the stock will stay down for long.