Equities Research Analysts’ downgrades for Wednesday, August 30th:

Applied Industrial Technologies (NYSE:AIT) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Applied Industrial reported better-than-expected fourth-quarter fiscal 2017 results. The company believes that robust upstream business, sturdy performance of the U.S. fluid power business, and superior customer servicing skills will likely bolster its top-line performance in the quarters ahead. Moreover, sound restructuring moves, greater productivity and increased cost discipline are projected to strengthen the company’s near-term bottom-line performances. However, over the last three months, the stock has underperformed the industry.  The company perceives that a stronger U.S. dollar might continue to hurt its overseas market revenues in the quarters ahead. Even so, other headwinds such as increasing industry rivalry or consolidation among consumers or suppliers, might curtail near-term growth.”

AMTEK (NYSE:AME) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “AMETEK is a leading manufacturer of electronic appliances and electromechanical devices. The company posted better-than-expected second-quarter 2017 results surpassing the Zacks Consensus Estimate on earnings and revenues. AMETEK continues to reap the benefits from the execution of its four core growth strategies of operational excellence, global market expansion, investments in product development and strategic acquisitions. This, in combination with a strong portfolio of differentiated businesses, is expected to help the company post better results, going forward. However, weakness in its balance sheet and integration issues and an overly high goodwill associated with an aggressive acquisition strategy are concerns. Foreign exchange headwinds remain. Year to date, the stock has underperformed the  industry it belongs to.”

Amphenol Corporation (NYSE:APH) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Amphenol’s top-line growth is benefiting from improved end-market demands in automotive, mobile networks and military markets. The company remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content on next-generation planes. A balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team augur well for its long-term growth perspectives. Amphenol outperformed the industry year to date. However, increasing cost of raw materials is a matter of concern and is likely to be a drag on its profitability. Bulk of the company’s revenues comes from sales to the communications industry, demand for which is subject to rapid technological change. In addition, unfavorable foreign currency movements often impact sales, affecting its long-term growth to some extent.”

American Express (NYSE:AXP) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “The stock of American Express has outperformed the industry in last one year. The company is gaining from investments made in growth opportunities over the last couple of years. A solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. Strategic initiatives focusing on the platinum card portfolio and OptBlue program will drive business volume. Cost reduction and return of significant capital to shareholders through dividend and share buyback are other positives.”

Bed Bath & Beyond (NASDAQ:BBBY) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Bed Bath & Beyond  is focused on strategic initiatives like eCommerce enhancement and improvement of customer services, as also evident from its recent store realigment plan. Also, comps from customer-facing digital networks grew over 20% in the last reported quarter. Additionally, Bed Bath & Beyond’s capital initiatives and constant shareholder-friendly moves should draw investors’ attention. However, the company has lagged the broader industry in the past year owing to its unimpressive past performances. Well, Bed Bath & Beyond has been reeling under sluggish mall traffic that has been intensifying with increasing shift toward online shopping. Also, margins have been pressurized for four quarters now, owing to increased expenses. Additionally, the company's global presence keeps it exposed to currency woes. Unfortunately, management's dismal view for fiscal 2017 raises concerns about these obstacles to linger.”

BorgWarner (NYSE:BWA) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “BorgWarner earnings and revenues beat the Zacks Consensus Estimate in the second quarter. Moreover, high organic net sales growth expectations are likely to aid BorgWarner going forward. Huge business opportunities in Asia, the Americas and Europe in the next three years are anticipated to contribute to a major portion of growth. Also, a healthy balance sheet and ample cash flow help the company to return capital to its shareholders’ and undertake acquisitions. However, its inability to pass on any rise in raw materials to OEMs, is adversely impacting its profit. Moreover, foreign currency fluctuations and business divestitures are other headwinds BorgWarner has been facing. Also year-to-date, its share has underperformed the industry it belongs to.”

E.I. du Pont de Nemours and (NYSE:DD) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “DuPont’s adjusted earnings for second-quarter 2017 topped the Zacks Consensus Estimate. Revenues also rose year over year and beat expectations. DuPont has outperformed the industry it belongs to over a year. DuPont is well placed to gain from its cost-cutting and productivity improvement measures. The company's aggressive actions to cut operational costs should continue to lend support to its earnings. Its agriculture business is also gaining from new product launches. The company has numerous new products in its pipeline that should contribute to top line growth. DuPont is also moving forward with its planned mega-merger with Dow Chemical, which is expected to create significant synergies. However, DuPont is exposed to raw material cost pressure and currency headwind and also faces certain challenges in its nutrition & health and electronics businesses. Its agriculture business is also not out of the woods yet.”

Duke Energy Corporation (NYSE:DUK) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Duke Energy’s hefty investment plans for the next five years is expected to improve its business by generating cleaner energy and bolstering its renewable asset base, buoys optimism. The acquisition of Piedmont Natural Gas is also expected to offer substantial boost to its business. Duke Energy also pursues a systematic asset divestment initiative. Moreover, it outperformed the broader industry in the last year. Yet, stringent environmental regulations, severe weather patterns and foreign exchange risks may hinder Duke Energy’s performance. Further, adverse outcome from pending regulatory cases may also negatively impact its earnings. Potential volatility in market prices of fuel, electricity and other renewable energy commodities could create operational risks for the company.”

Gap, Inc. (The) (NYSE:GPS) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Gap’s shares have outpaced the industry in the last three months, driven by its solid focus on enhancing product quality and responsiveness to changing consumer trends. Evidently, the company has been making constant efforts to boost its digital and mobile offerings, alongside improving product acceptance. The success of these endeavors was clearly visible when Gap’s second-quarter fiscal 2017 marked its second straight earnings beat, and sales topped estimates for the fifth consecutive quarter. Also, comps continued being fueled by Old Navy strength and recovery of the namesake brand. Notably, Gap’s growth efforts and a solid first half encouraged management to raise its fiscal 2017 earnings view. However, currency woes are likely to persist in fiscal 2017. Also, management expects high SG&A expenses in the third quarter, stemming from increased investments for the back-to-school season.”

Home Depot, Inc. (The) (NYSE:HD) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Home Depot’s spectacular past performance has helped it to surpass the industry in the past year. The company has been consistently gaining from its interconnected strategy, focus on Pro customers, and housing market recovery. These factors helped the company post a stellar second-quarter fiscal 2017 performance, which marked its highest ever quarterly sales and earnings. Notably, sales marked its 13th straight beat, while earnings retained its 5-year long trend of positive surprise. Results were driven by solid growth across all regions, both in stores and online. Also, Pro category sales continued to outperform, driven by constant efforts to enrich customers’ experiences. The sturdy first half and expectations of improved home prices encouraged the company to raise its fiscal 2017 view. However, gross margin remained plateaued, and is likely to fall 10 bps in fiscal 2017. Also, competition from online retailers may impact results.”

IDEX Corporation (NYSE:IEX) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “With a flexible yet disciplined focus on cost and productivity, IDEX expects to successfully tap newer markets to boost its revenue. The company intends to optimize its cost structure, increase competitiveness and reallocate resources to improve profitability. IDEX has historically generated a healthy cash flow that allows management the opportunity to invest in product innovations, acquisitions and business development. Management also raised its earlier guidance for 2017 on robust demand patterns and healthy growth dynamics. IDEX outperformed the industry year to date. However, huge recurring R&D expenses increase operating costs and reduce its price control over products, which often result in the loss of market share, declining sales and lower operating margins. With operations across five continents, IDEX’s performance is also exposed to the adverse impact of macroeconomic cycles in the U.S. and international markets.”

McCormick & Company, (NYSE:MKC) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “McCormick’s shares have underperformed the Consumer Staples sector over the past six months, owing to increasing input material costs that have been hurting its margins. Also, the company’s EMEA business has remained sluggish due to a difficult economic environment, particularly in the U.K. Nevertheless, McCormick’s strategic acquisitions have been aiding top-line growth. It recently completed the acquisition of the food division of Reckitt Benckiser Group, which is expected to place the company as one of the leading companies in the U.S. condiments category. It also focuses on saving costs and enhancing productivity through its ongoing Comprehensive Continuous Improvement program. Product innovation and brand marketing support have also contributed to the growth of the company’s sales. Going forward, the company anticipates pricing actions to offset an anticipated mid-single digit increase in material costs in fiscal 2017.”

Monsanto (NYSE:MON) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Over the last twelve months, Monsanto's shares outperformed the industry. The company reported better-than-expected third-quarter fiscal 2017 results. Increasing demand for crop-yield enhancing products, stronger innovation and success of Bayer's buyout deal are anticipated to bolster Monsanto's top- and bottom-line performance in the quarters ahead. However, challenging pricing conditions prevailing in the agricultural market might limit near-term growth. In addition, headwinds like weaker currencies of major overseas markets, such as Brazil, or stiff industry rivalry remain major causes of worry. Over the last 30 days, Zacks Consensus Estimate for the stock has remained unchanged for fiscal 2018.”

Winnebago Industries (NYSE:WGO) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Winnebago is facing challenges due to sales decline of the Motorized segment. High cost of production at its Junction City, Oregon facility has hit the motorized segment badly. Also, under the signed repurchase agreements, the company will buy back its default products from the dealers, which will lead to an increase in capital expenditure. Also, the company is burdened with debt due to the Grand Design acquisition. However, . The company has been focusing to increase its production of Class A gas and Class C motorhomes by building new facilities, which will lead to a rise in product demand, in future.In the last three months, Winnebago’s shares outperformed the industry it belongs to.”

William Demant Hol (NASDAQ:WILYY) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “William Demant Holding A/S develops, manufactures and sells products and equipment designed to aid the hearing and communication of individuals. The Company focuses on three business areas: Hearing Devices, Diagnostic Instruments and Personal Communication. William Demant Holding A/S is headquartered in Smorum, Denmark. “

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