JPMorgan has downgraded Frontdoor (FTDR, Financial) from Overweight to Neutral, setting a new price target of $40, a significant reduction from its previous target of $58. This reassessment precedes the release of the company's first-quarter earnings.
The downgrade is part of a broader adjustment by JPMorgan, which includes revising estimates, multiples, and price targets for numerous small-cap internet and video game firms. These changes are attributed to prevailing macroeconomic uncertainties and the impact of tariffs.
Frontdoor is particularly affected by a 25% blanket tariff on steel and aluminum, which poses challenges to its gross margins. Additionally, a weaker macroeconomic environment is expected to exert pressure on the company's direct-to-consumer sales channel, compounding the difficulties faced by the home services provider.
