After an indecisive start to Friday’s trading in response to a mostly-encouraging January jobs report, traders decided to see the glass as half empty, rather than half full, to close out the week. The S&P 500’s close of 1880.02 was down 1.85%.
Leading that bearish charge were LinkedIn Corp (NYSE:LNKD), Tesla Motors Inc (NASDAQ:TSLA) and Hanesbrands Inc. (NYSE:HBI). Here’s a closer look at want went wrong for each.
LinkedIn Corp (LNKD)
LinkedIn was far and away Friday’s biggest loser, with LNKD shares giving up more than 40% of their value in the wake of solid Q4 earnings, but (apparently) a terrifying outlook for 2016.
Last quarter, the social-networking site aimed at professionals earned 94 cents per share on revenue of $862 million. Analysts were calling for a bottom line of 78 cents per share and sales of $857 million. For the current year, however, LinkedIn now expects revenue to roll in somewhere between $3.6 billion and $3.65 billion, falling well short of the consensus outlook of $3.9 billion.
Mizuho Securities analyst Neil Doshi said of the numbers that prompeted him to downgrade LNKD from a “Buy” to a “Neutral”:
“Clearly, we were wrong. With a lower growth profile, we believe that LinkedIn should not enjoy the premium multiple it has grown accustomed to. For now, we are moving to the sidelines.”
The steep 43% selloff on Friday was the worst single day ever for LNKD.
Hanesbrands Inc. (HBI)
In the same vein as LNKD (though not as harshly), Hanesbrands shares plunged today following a rough fourth-quarter report and an alarming outlook for 2016.
Last quarter, the apparel maker earned 44 cents per share on revenue of $1.41 billion. The pros, though, were expecting the company to report a profit of 46 cents per share of HBI and $1.53 billion in sales. Looking ahead, the t-shirt and underwear brand expects its 2016 top line to come in between $5.8 billion-$5.9 billion, versus analyst estimates of $6.0 billion.
HBI lost 15% today.
Tesla Motors Inc (TSLA)
Last, but not least, though it was already in a downtrend and may have been en route to another loss today anyway, the selloff plaguing Tesla shares of late was at least partially exacerbated on Friday following another round of red flags from analysts.
UBS arguably did the bulk of the 10% damage on Friday, pointing out several risks TSLA poses to shareholders heading into next week’s earnings report.
The core of those concerns is an increasingly competitive electric vehicle market against a backdrop of increasingly weaker demand for EVs altogether due to cheap gasoline prices. UBS added that production of the Model X isn’t ramping up as quickly as had been suggested, forcing analysts Colin Langan and Eddie Hash to dial back their 2016 delivery estimates of the vehicle. The pair also expects production of the Model 3 to be delayed — as most of the company’s cars have been — beyond the current target launch date of late-2017.
Today’s 7% drop from TSLA translates into a 31% pullback from the stock’s peak in late December.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
