Equities Research Analysts’ downgrades for Tuesday, September 19th:

Accenture PLC (NYSE:ACN) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Accenture offers management consultancy, technology and outsourcing services. Shares of the company have outperformed the industry over the past year. We are positive about Accenture’s latest product additions in the analytics application space, given the increasing demand for digital solutions. Moreover, Accenture’s strategy of growing through partnerships like Apple and acquisitions like IBB and VERAX are encouraging. The strategies have enabled Accenture to enter new markets, diversify and broaden its product portfolio, and maintain its leading position. Nonetheless, Accenture’s recent announcement of creating 15K new jobs by 2020 and investment plan of $1.4 billion for employee training and opening of 10 innovation centers across the U.S. cities may dent its bottom-line results in our opinion. Furthermore, increasing competition from peers and an uncertain macroeconomic environment may deter its growth to some extent.”

American Financial Group (NYSE:AFG) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Shares of American Financial have outperformed the industry year to date. The company is well poised to benefit from impressive inorganic growth and restructuring initiatives. Better industry fundamentals, with strong pricing and a higher renewal ratio, should drive overall growth. Consistent price increase in property and casualty business, combined ratio that compares favorably with industry average, a strong balance sheet, low leverage cost, and disciplined capital management are positives. Based on strong operational performance, it raised core net operating earnings of $6.40–$6.90 per share in 2017. Estimates for 2017 and 2018 also moved north over the last 60 days.  However, American Financial’s exposure to cat loss is a risk to underwriting results. A still soft interest rate environment is expected to weigh on desired upside in investment results.”

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.”

Anthem (NYSE:ANTM) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Anthem’s shares have outperformed the industry in last one year. The company’s diverse product portfolio has helped in improving underwriting results. Anthem’s strategic acquisitions, divestitures and ACO arrangements further pave the way for long-term growth. Its rising level of medical membership continues to boost the top line. Its strong capital position backs effective capital deployment. Its frequent share buyback programs and regular dividend payments primarily aim at enhancing shareholders’ value. The company has seen the Zacks Consensus Estimate for 2017 and 2018 earnings being revised upward over the last 60 days. Followed by strong results in first half of 2017, the company has raised the earnings and revenue guidance for 2017. However, the company's interest expenses increase due to mounting level of debt that continues to weigh on margins. Also softness in public exchange business remains a major headwind.”

Arrow Electronics (NYSE:ARW) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Estimates for Electronic component distributor, Arrow Electronics have moved north of late. Shares of the company have also outperformed the industry over the last one year. Original equipment manufacturers, contract manufacturers and commercial customers are selecting Arrow’s strong distribution channels for marketing their products, which is driving its revenues. We believe that the company’s core strength in providing best-in-class services and easy-to-acquire technologies should drive growth in the long run. Moreover, the company has secured a significant market share through a broad portfolio of products and services, and continued efforts to maximize consumer satisfaction. Additionally, incremental sales from strategic acquisitions are expected to boost the top line. However, an uncertain economic environment, high debt burden and competition remain the concerns.”

Acuity Brands (NYSE:AYI) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Shares of Acuity Brands lost 27.3% so far this year. Acuity Brands operates in a highly competitive industry that is affected by volatility owing to a number of general business and economic factors. Higher spending on research and development of energy efficient lighting products may dent margins and thereby the bottom line of the company. Gross profit margin in the last quarter decreased 200 basis points year over year. The company’s profits in the last quarter were adversely impacted by higher-than-normal supply chain costs, including increased quality expenses and inbound freight charges.”

Hugo Boss (OTCMKTS:BOSSY) was downgraded by analysts at Morgan Stanley from an equal weight rating to an underweight rating.

Comerica (NYSE:CMA) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Shares of Comerica have underperformed the industry year to date. Yet, the company boasts an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters. Comerica’s future prospects look promising as it improvised the financial targets for revenue and efficiency initiatives (GEAR Up). Further, easing of margin pressure driven by the Fed rate hikes is encouraging. However, its exposure to Michigan and California, two challenging economies, remains a headwind. Also, significant exposure to commercial loans keeps us apprehensive. Further, a stretched valuation indicates that the stock has limited upside potential.”

Domino’s Pizza (NYSE:DPZ) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Domino's shares have outpaced the industry year to date. The company’s solid brand positioning should continue to boost sales in the upcoming quarters. Also, efforts to accelerate its presence in high-growth international markets bode well. Notably, the company’s revenues and earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters. In fact, second-quarter 2017 marked the 25th and 94th consecutive quarter of positive same-store-sales domestically and internationally, respectively. Going forward, Domino's initiatives on the digital front, focus on re-imaging and other sales boosting strategies are expected to help sustain the momentum. However, a soft consumer spending environment in the U.S. restaurants space might limit revenue growth. Higher costs and negative currency translation are likely to hurt profits too.”

First Horizon National Corporation (NYSE:FHN) was downgraded by analysts at Zacks Investment Research from a buy rating to a sell rating. According to Zacks, “Shares of First Horizon have underperformed the industry so far this year. Yet, the company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. Further, its focus on cost control and efforts to strengthen its core Tennessee banking franchise bode well for the long term. Also, the Fed rate hikes have eased the pressure on margins to some extent. Moreover, First Horizon’s inorganic growth strategies are likely to support the top line. Improving credit quality is also a tailwind.  However, higher legal costs resulting from numerous litigations are likely to weigh on the company’s profitability. Further, high exposure to commercial and commercial real estate loans seems risky.”

General Mills (NYSE:GIS) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “General Mills' consumer-focused innovation, marketing initiatives and robust restructuring savings are making up for the sluggish revenue growth. The company is currently pursuing several initiatives focused on improving operational efficiency to generate cost savings and support its key growth strategies. By fiscal 2018, the company expects to achieve cost savings through increased efficiency, reduced complexity through SKU optimization, further supply chain optimization and continued expansion of zero-based budgeting across the business, which will result in accelerated margin expansion. It is on track to achieve its cost savings target for fiscal 2018 as it forges ahead with its margin expansion efforts. However, General Mills' shares have underperformed the industry so far this year. Slowing organic volumes are overshadowing minor improvements in profit margins.”

Hasbro (NASDAQ:HAS) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Hasbro’s earnings have topped the Zacks Consensus Estimate in all the past 10 quarters. Revenues too have been surpassing the consensus mark, except for the last quarter. Consistent efforts to establish its global presence via strategic partnerships and rapid growth in emerging markets should continue driving the top- and bottom–line performance. However, Hasbro’s shares have underperformed its industry year to date. Even so, this year’s rich content slate, new product launches, diverse initiatives to boost sales along with a favorable gaming portfolio should further drive growth ahead. Going forward, the Franchise and Partner Brands, particularly, are expected to perform consistently in 2017 given global digital content and innovative offerings. Yet, increased competition from alternative modes of entertainment might limit top-line growth, while high costs along with macroeconomic and currency headwinds may pressurize profits.”

Hancock Holding (NASDAQ:HBHC) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Hancock Holding’s shares have outpaced the industry in the last six months. The performance was supported by the company’s impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. While strategic initiatives, growth in loan and deposit balances, improving rate environment and potential lesser regulations should support profitability, rising operating expenses remains a near-term concern for the company. As the bank continues to invest in franchise and grows inorganically, expenses are expected to remain elevated in the quarters ahead. Also, its exposure to risky loan portfolios makes us apprehensive.”

Industria de Diseno Textil SA (OTC:IDEXY) was downgraded by analysts at Morgan Stanley from an overweight rating to an equal weight rating.

Intel Corporation (NASDAQ:INTC) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Intel’s growing focus on the data-centric part of the business is positive. The launch of Xeon Scalable is anticipated to improve its footprint in the data center as well as AI space, going forward. The company recently unveiled Myriad X, which will boost footprint in the IoT space. Moreover, the recent Core 8 launch will boost PC market share amid intensifying competition from AMD. We note that the top-PC makers like HP, Lenovo, and Asus are set to launch PCs based on Qualcomm’s ARM-based Snapdragon processor, which is a headwind for the company. Further, anticipated improvement in cost structure and lower spending, primarily due to improving operational efficiency will aid in expansion of margins going forward. Additionally, aggressive share buyback will boost the bottom line in 2017. However, we note that Intel has underperformed the industry on a year-to-date basis. Moreover, declining PC-shipments is a concern.”

KeyCorp (NYSE:KEY) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “KeyCorp’s shares have outperformed the industry over the past year. The performance was supported by the company’s impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. While the bank remains well positioned to benefit from rising rate environment, rise in loan and deposit balances, potential lesser regulations, and improving economic stability, exposure to real estate loans poses a risk to the company. Although there has been an improvement in the housing sector, any further deterioration in the real estate prices will create troubles for the company.”

lululemon athletica inc. (NASDAQ:LULU) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Lululemon has surpassed the industry in the past three months, mainly driven by its focus on strategy for 2020, as part of which it aims to generate revenues of $4 billion. To achieve this, the company is committed toward product innovation, building store fleet in North America, expanding digital business and global expansion. All these factors helped Lululemon to post robust numbers in second-quarter fiscal 2017, even amid a tough retail landscape. Both sales and earnings topped estimates and grew year over year. While the bottom line marked its 2nd consecutive beat, the top line recorded its 7th straight quarter of positive surprise. Also, sturdy e-Commerce growth fueled comps. Apart from this, the company is on track with ivivva’s remodeling. The solid results and favorable third quarter trends encouraged management to raise its fiscal 2017 view. However, stiff competition and volatile consumer spending patterns may pose concerns.”

Mitsubishi UFJ Financial Group (NYSE:MTU) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Mitsubishi UFJ’s shares underperformed the industry on NYSE over the last six months. Though the negative interest rates in Japan and global growth concerns, along with strict regulations, remain headwinds, strong capital ratios and organic growth will likely support the company’s bottom-line growth. Also, the company’s prospects look encouraging, as it remains focused on several strategies under its medium-term business plan (2016–2018) and global expansion.”

RWE AG (OTC:RWEOY) was downgraded by analysts at BNP Paribas from a neutral rating to an underperform rating.

Sun Life Financial (NYSE:SLF) (TSE:SLF) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Shares of Sun Life Financial outperformed industry, quarter to date. The company also witnessed estimates moving north over the last 60 days. Aggressive re-designing of products, improved pricing, and focus on segments with higher growth and return complemented by market factor of reduced interest rate and market risk bode well. A strong balance sheet and effective capital deployment in growth initiatives will fuel earning, ROE and enhance shareholders’ value. The company continues to forge ahead with its digital and wealth initiatives in Canada, strong sales momentum in Asia, the scaling and integration of its U.S. operations, and strong long-term investment performance in asset management businesses. It targets medium-term EPS growth between 8% and 10%. However, exposure to macro headwinds, regulatory uncertainties and low rates are headwinds.”

Tenet Healthcare Corporation (NYSE:THC) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Tenet Healthcare’s shares have underperformed the industry in last one year. The company has a high level of uncollectible accounts despite several divestures. Rising level of bad debts over past few quarters has led to a spike in interest expenses that has been weighing on the margins. Its operating expenses have also been rising rapidly putting pressure on the bottom line. The company has seen its Zacks Consensus Estimate for 2017 and 2018 earnings being revised downward in last 60 days. Following the lackluster second-quarter 2017 results, the company has lowered its guidance for 2017.”

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