Analyst Actions: Clorox Downgraded on Reset Fears, AXT Inc. Upgraded on Strong Growth

Wall Street analysts made several significant ratings changes this past week, reacting to corporate guidance revisions, management shifts, and evolving fundamental outlooks. Key calls included downgrades for Clorox and Huntington Bancshares, while AXT Inc., Ribbon Communications, and New Oriental Education received upgrades.

Downgrades on Margin Pressure and Reset Concerns

Jefferies downgraded Clorox Co. (CLX) to Hold, stating its previous bullish thesis was incorrect. The firm noted persistent soft market share trends and signals of an impending corporate reset under a new CEO, which is expected to lead to higher reinvestment costs and lower profits. Jefferies now anticipates Clorox's upcoming fiscal 2027 guidance will fall approximately 6% below consensus estimates.

Bank of America Securities cut Huntington Bancshares (HBAN) to Neutral from Buy, lowering its price target to $18.50. The bank expressed skepticism about management's ability to hit its ambitious 2027 earnings per share targets of $1.90–$1.93, citing pressure on net interest income (NII). Following a recent NII miss, BofA reduced its own EPS estimates for the regional bank.

Upgrades Follow Outlook Revisions and Strong Results

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In a counterintuitive move, B. Riley upgraded Ribbon Communications (RBBN) to Buy from Neutral with a new $3.30 price target, precisely because management cut its full-year 2026 outlook. B. Riley viewed the previous targets as overly aggressive; the new, more achievable baseline is seen as reducing execution risk. The firm highlighted strong IP/Optical bookings, which have driven a book-to-bill ratio of 1.25.

Needham upgraded AXT Inc. (AXTI) to Buy from Hold, establishing a $90 price target. The upgrade followed a significant earnings beat on revenue, EPS, and forward guidance. According to Needham, the semiconductor substrate supplier is benefiting from new contracts with two major laser manufacturers and plans to double its Indium Phosphide substrate capacity.

New Oriental Education & Technology (EDU) was upgraded to Neutral by Macquarie, which cited the company's significant capital return program. While the firm remains cautious on core operational performance, it noted that a new $500 million shareholder return package—consisting of $300 million in dividends and $200 million in buybacks—provides a total return yield of approximately 6%, making the stock's valuation reasonable.