Cognex slips as J.P. Morgan downgrades citing 'softening demand' seen in Q2
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Cognex (NASDAQ:CGNX) shares slipped on Friday as investment firm J.P. Morgan downgraded the manufacturer of machine systems and software, citing "softening demand" in its second-quarter and high customer concentration from Amazon (AMZN) and Apple (AAPL).
Analyst Paul Chung lowered his rating on Cognex (CGNX) to underweight from neutral, but kept the firm's $40 price target, noting that a "pause" in logistics spending is worrisome, especially from Amazon (AMZN).
"Customer concentration risk remains elevated at Amazon and Apple, and given pause in logistics spending at Amazon which drove $300mm in revenues [fiscal 2021] ~up 65% [year-over-year], we sense we may see multiple years of digestion," Chung wrote in a note to clients.
Cognex (CGNX) shares fell almost 2% to $47.61 in premarket trading. 
Chung also noted that consensus estimates for the fourth-quarter may be "a bit high," citing issues such as softening logistics demand, foreign exchange headwinds, component inflation and destroyed inventory at a key partner, in addition to "limited guidance" given by the company. 
Earlier this month, Cognex (CGNX) slumped badly after it missed second-quarter estimates and issued a third-quarter outlook that was well below expectations.
Analysts are extremely varied on Cognex (CGNX). It had an average rating of HOLD from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates CGNX a STRONG SELL.