Morgan Stanley downgraded Chegg (CHGG) to Underweight from Equal Weight with a price target of $1.25, down from $2. The firm says a “steep drop” in third party data trends suggest Chegg’s consensus estimates may prove to be too high. This creates a tough setup for a “secularly challenged stock” which is up over 20% off its 2024 lows, the analyst tells investors in a research note. Web traffic and app download data trends for Chegg weakened significantly in November and December, contends Morgan Stanley. It believes impacts from an intensifying generative artificial intelligence competitive landscape are “still to come” as those students with more history and allegiance to Chegg graduate.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio