Sonos slides as BofA downgrades to "neutral" from "buy"

Sonos

07/11/2023 17:33

** Shares of Sonos Inc  SONO.O  fell by 6.6% to $10.56 after
Bank of America Global Research analysts downgraded the consumer
electronics firm to "neutral" from "buy"
    ** Stock had traded as low as $10.10
    ** Co is being downgraded because of "continued softness in
consumer spending, the long replacement of home audio products,
weak housing turnover, and SONO's elevated inventory and
promotions" - BoFA analysts led by Jason Haas
    ** Home audio sales would take "several quarters, if not
years" to rebound post-pandemic given their long replacement
cycle and "weak housing turnover" will further "push out a
recovery in demand" - BoFA analysts
    ** SONO premium pricing is also showing signs of cracking,
indicating that Co is not immune to industry headwinds despite
its positing in the upper end of the market - BoFA analysts 
    ** "The company recently ran a heavy 40% off one purchase up
to $2,000 off to select existing Sonos users. This follows a
longer-term trend towards more promotions as demand has waned
since 2021," said BoFA analysts
    ** Median PT of the 8 analysts covering SONO is $19, down
from $20 in October, and their current recommendation is "buy"
    ** With today's move, SONO is down 37.5% YTD


 (Reporting by Chibuike Oguh in New York)