S&P/ASX 200 Index (ASX: XJO) shares are down 0.4% to 8,934.6 points on Thursday.
Brokers have downgraded several stocks this week.
Let's take a look at their new ratings and 12-month share price targets.
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Transurban Group (ASX: TCL)
The Transurban share price is $15.06, up 1.1% today.
Over the past month, this ASX 200 industrials share has popped 4.1% higher.
Morgans downgraded Transurban shares from a hold to sell rating yesterday.
The broker said:
TCL's update indicated traffic is running below expectations. TCL also announced its exit from the Montreal market via divestment, crystallising an equity value loss.
TCL's recent share price strength (+9% since its February result and not far off all-time highs) is not reflective of the weaker traffic growth and higher interest rate environment that typically challenges TCL's valuation.
We recommend clients use the share price strength to take profits in overweight positions.
Morgans has a 12-month price target of $12.50, implying a potential 17% downside ahead.
Rio Tinto Ltd (ASX: RIO)
The Rio Tinto share price is $183.32, down 1.9% today.
Over the past six months, this ASX 200 mining share has ripped 28%.
Macquarie downgraded Rio Tinto shares to a hold rating on Tuesday.
The broker lifted its 12-month price target from $186 to $188.
This suggests only a potential 2% upside ahead.
Domino's Pizza Enterprises Ltd (ASX: DMP)
The Domino's Pizza share price is $16.25, down 0.4% today and down 26% YTD.
This ASX 200 consumer discretionary share has tumbled 28% over six months.
Morgans downgraded its rating on Domino's Pizza shares to a hold this week.
The broker said:
The trading environment for DMP has become more challenging than previously assumed, and we have updated our forecasts to reflect a weaker SSS (same-store-sales) outlook across all three regions, compounding cost pressures on ANZ franchisee economics, and a more adverse FX environment in Japan.
The earnings recovery, albeit modest, remains on track but it is entirely cost-driven; there is no volume improvement embedded in our numbers until outer years.
We move to a HOLD rating until there is evidence of further cost management and SSS recovery.
The broker reduced its price target on Domino's Pizza shares from $25 to $17.60.
This indicates potential capital gains of 8% over the next year.
Wesfarmers Ltd (ASX: WES)
The Wesfarmers share price is $86.43, up 1.1% today.
Over the past month, this ASX 200 retail share has soared 21%.
Macquarie downgraded Wesfarmers shares to a hold rating with an $85 target.
This suggests the stock is fully valued today.
