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.
Travis Hoium owns shares of JPMorgan Chase. The Motley Fool owns shares of Citigroup Inc and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.