Appen Shares Drop After Citi Downgrades Stock on Guidance Risk
06 Juni 2022 - 6:00AM
Dow Jones News
By Stuart Condie
SYDNEY--Appen Ltd.'s shares slumped close to a five-year low
after Citi analysts downgraded the stock on risk that the data
annotation company could miss its annual earnings guidance.
The Citi analysts cut their recommendation to neutral from buy,
following the Australian company's weaker-than-expected start to
2022, which leaves it needing a strong second half.
"Appen management noted that... the weakness was primarily due
to one customer, which we see as likely being Facebook based on our
website visit analysis," the analysts said in a note.
Appen's shares are down 4.2% at A$6.13 after earlier hitting
A$6.09. The stock, which was worth as much as A$43.50 in August
2020, touched an intraday low of A$6.08 in February, which was its
lowest since November 2017.
Citi's team also said in a note that Canadian tech company Telus
International (Cda) Inc.'s takeover bid for Appen last month showed
that demand for human-labeled artificial-intelligence training data
still exists.
Telus later withdrew its A$9.50-a-share bid, which valued
Appen's equity at 1.17 billion Australian dollars (US$843.2
million), after the takeover proposal was made public.
Citi's analysts slash their target price for the stock by 28% to
A$6.60, but added that Appen remains attractive given its market
position.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
June 05, 2022 23:45 ET (03:45 GMT)
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