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Sotheby’s Stock Falls 6% on Analyst’s Downgrade
Cowen’s Oliver Chen released a note earlier today linking Sotheby’s to lower expectations of global growth for 2019. The note provoked a 6% slide in Sotheby’s stock which had been on a month-long rally from its low of $36 on Christmas Eve.
- "We believe supply gathering is key to Sotheby's success and a combination of lower consumer confidence at the high-end, S&P 500 market volatility, and tough comparisons given prior years of solid momentum are all negatives for 2019," Chen said.
- "As financial volatility looms, we believe consumers will be more conscious of their spending, which can be a factor contributing to weaker auction sales," Chen said in a note Thursday. "As consumers become less optimistic about valuation, they will likely hold back on putting their pieces up for auctions, leading to contracted supply gathering for Sotheby's."
Curiously, the auction houses seem to have started the year with spate of competitive pitches. Industry folks were expecting a slowdown after the run of major sales in 2018 but most have been surprised to be called to make their best presentations for several estates. That runs counter to some of Chen’s reasoning (in bold added above.)
Though hen pegs Sotheby’s (BID) to the S&P 500, Sotheby’s stock also correlates to crude oil. Neither was down today as BID fell though the floor.
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