Benzinga | Aug 13, 2021 11:47AM EDT

Cowen, JP Morgan Downgrade ContextLogic On Q2 Earnings Disappointment, Slash Price Targets

* Cowen analyst John Blackledge downgraded ContextLogic Inc (NASDAQ:WISH) to Market Perform from Outperform with a price target of $10, down from $18, implying a 6.3% upside.

* The rating came after the company reported Q2 revenue, margins, and EBITDA that missed expectations.

* ContextLogic 's Q3 outlook implies revenue could decline 35% sequentially as the business trajectory has softened, noted Blackledge, who has materially lowered his long-term estimates for sales and EBITDA.

* JPMorgan analyst Doug Anmuth downgraded ContextLogic to Underweight from Overweight with a price target of $5, down from $17, implying a 46.9% downside.

* The company's Q2 results and Q3 outlook suggest more significant damage to the business model. Anmuth thinks the new product strategy could take "many quarters" to materialize, and he sees considerable execution risk.

* ContextLogic's Q2 revenue of $656 million missed the analyst consensus of $723 million as the Core Marketplace segment sales plunged 32% Y/Y.

* Price Action: WISH shares traded lower by 20.9% at $7.44 in the market session on the last check Friday.