By Sam Boughedda
GoPro Inc (NASDAQ:GPRO) was downgraded to Neutral from Overweight, with its price target lowered to $6 from $9 by JPMorgan on Friday.
Analysts there told investors in a note that GoPro's third-quarter results were slightly ahead of expectations, although fourth-quarter guidance missed materially driven by FX and a reduction in inventories at big box retailers.
"Resulting gross margins are expected to be well under LT margin targets by ~500+bps and we sense we need to wait until 2H23 for a rebound back in margins. On a positive note, DTC mix is growing, while subscription attach rates at retail are up materially y/y," wrote the analysts.
They went on to explain further that GoPro's fourth-quarter guidance was "well below" expectations.
"GPRO expects 4Q22 PF EPS of $0.03-$0.15 on revenues of $285mm-$365mm," they said, adding that FY22 guidance was also well below forecasts. "We downgrade to Neutral on the tough macro backdrop, softening consumer spend, and limited catalysts ahead," they concluded.
GoPro shares are down over 4% Friday.