Another major Wall Street analyst also downgraded Pershing Square stock.
Another major Wall Street analyst also downgraded Pershing Square stock.
Pershing Square Inc. (PS -4.69%), the investment firm founded and run by Bill Ackman, went public in April, and the stock has soared since then.
It opened at $24 per share on April 29 as part of a combined initial public offering with the firm's Pershing Square USA fund. Since then, PS stock skyrocketed to a high of $60 per share on Oct. 7 -- a 150% gain at its peak.
But shares have plummeted over the past week, down some 25% from their Oct. 7 peak to $45 per share. The catalyst is two recent Wall Street downgrades.
Citi and BofA downgrade PS
Last week, analysts at Citi slapped it with a sell rating, down from neutral, but maintained its $45-per-share price target. Citi cited its high valuation, trading at 54 times forward earnings expectations.
Citi lowered its earnings projections for Pershing Square in 2027 to $0.89 per share from $1.01 per share in 2027. The reduced earnings estimates are tied to tepid investment performance of Pershing Square's funds, including its two largest, Pershing Square Holdings and Pershing Square USA. And given the uncertain market ahead, Citi expects modest returns over the next year.
Still, even with the reduced expectations, the $0.89 in earnings per share would be a significant increase over the estimated $0.51 per share adjusted earnings that analysts project for 2026. So it's really more about the high valuation, as the stock came charging out of the gates in April.
This week, BofA followed suit, downgrading Pershing Square stock to underperform, from neutral, and lowering its price target from $54 per share to $38 per share.
$44.48-$2.19 (-4.69%)
Averytin News Financial update.