UPDATE: Raymond James Downgrades Frontdoor Inc. (FTDR) to Market Perform

Raymond James analyst Aaron Kessler downgraded Frontdoor Inc. (NASDAQ: FTDR) from Outperform to Market Perform.

The analyst comments "We are downgrading shares of FTDR to Market Perform (from Outperform) given: 1) we expect revenue headwinds to continue for the foreseeable future across both its RE channel (higher interest rates impacting RE volumes) and DTC (more price sensitive customers in part due to macro headwinds); 2) inflation headwinds are likely to remain elevated though we are optimistic headwinds will ease in 2023 (3Q increase was stable vs. 2Q); 3) we believe risk/reward is balanced with shares at ~11x 2023E EV/EBITDA and ~20x EV/FCF given out outlook for limited near-term revenue growth (we estimate 2% revenue growth in 2023). An improving gross margin profile (potentially as inflation eases and price increases roll through) and acceleration in volume and revenue growth could be potential catalyst for shares and further multiple expansion. We note FTDR plans on hosting an analyst day in March where we would look to receive more info related to long-term growth and margin expectations."

For an analyst ratings summary and ratings history on Frontdoor Inc. click here. For more ratings news on Frontdoor Inc. click here.

Shares of Frontdoor Inc. closed at $24.16 yesterday.

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