Sotheby’s (BID) Stock Downgraded by Cowen & Co.
Shares of Sotheby's (BID) were trading down -1.91 or -4.25 percent to $42.98 in Tuesday's premarket after news early this morning that Cowen & Co. had downgraded the stock. In addition to today's downgrade news, the company announced on Friday that it would not pay dividends until after finding a new Chief Executive Officer. Sotheby's stock closed at $44.89, down -0.19 or -0.42 percent in Friday's regular trading session.
In a report issued early today, Cowen & Company downgraded Sotheby's stock from an "outperform rating to a "market perform rating, which drove the stock down in premarket trading. Other recent analyst research reports have given the stock mixed reviews, with an upgrade from Zacks on January 12th, which upgraded shares from a "neutral rating to "outperform with a target price of $46.50.
In a research note from January 15th, Barrington Research analysts upgraded the stock to a "buy and set a price target of $50 per share. Overall, three analysts have rated the stock as a "hold , while seven analysts have given the company a "buy rating with an average price target of $48 per share.
In related news, Sotheby's announced on Friday that it would suspend dividend payments in the interest of "preserving flexibility until the company finds a new Chief Executive. The company had been paying a quarterly dividend of $0.10 per share.
Sotheby's lead independent director Domenico De Sole said that, "As we conduct our search for a new Chief Executive to lead Sotheby's, we decided it is best to wait until a new leader is in place before making significant decisions about capital allocation. Our search is moving forward in a disciplined and thoughtful manner. We look forward to working with the new CEO to strengthen Sotheby's and provide value for shareholders."
Its current Chief Executive, William Ruprecht - who has been Chief Executive since 2000 - announced he would leave Sotheby's by mutual agreement with its board last November. The announcement to leave was several months after activist hedge fund manager Dan Loeb and others joined the company's board. Dan Loeb's hedge fund, Third Point LLC joined the Sotheby's board in May after a seven month campaign for a leaner and more profitable company, criticizing Mr. Ruprecht directly in an open letter.
Sotheby's stock price has fluctuated between $35 and $50 per share over the last year. This morning's action indicates investors are not happy with the Cowen & Co. downgrade or the suspension of the company's dividend. Until the company finds a competent Chief Executive, Sotheby's share price will continue under pressure.
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