Investing.com -- BellRing Brands was hit with a wave of analyst downgrades after the protein shake maker reported second-quarter results that included a sizable earnings miss and slashed its full-year EBITDA outlook by roughly 25%, sending shares down nearly 40% on Tuesday.

Shares sank 38.77% on Tuesday to an all-time closing low of $10.63, hitting an intraday low of $9.22, and extended their losses a further 2.7% in Wednesday’s premarket trading.

On the back of a disappointing print, Morgan Stanley cut its rating to Equal-weight from Overweight and lowered its price target to $13 from $24.

Bernstein downgraded the stock to Market-Perform from Outperform, trimming its target to $11 from $35, while Bank of America also moved to Underperform from Neutral with a $10 price objective, down from $19.

The quarter was marred by what BellRing characterized as a "perfect storm" of headwinds: heightened consumer price sensitivity, sustained competitive promotional intensity, and rising cost inflation.

Management cut its full-year net sales growth outlook to flat-to-plus-2% from a prior range of plus-4-to-6%, and reduced its adjusted EBITDA guidance to $315-$335 million from $425-$440 million previously.

A key concern for analysts was that the challenges appear to be broadening. Morgan Stanley analyst Megan Alexander Clapp noted the problems have expanded beyond competitive dynamics to include a consumer behavior shift, with ready-to-drink (RTD) shake buy rates declining for the first time in five years.

About 27% of RTD shake category volumes were sold on promotion in the quarter, up roughly 800 basis points year-over-year.

Clapp said the stock will likely remain under pressure, as the market "will need multiple quarters of evidence that the business has stabilized before re-engaging with the name."

Bernstein, which had previously believed that intense promotional activity was primarily confined to Costco and would ease over the course of fiscal 2026, said that assumption proved wrong.

"Instead, promotional activity from smaller insurgent brands has stepped up this quarter outside the club channel," analyst Alexia Howard wrote, adding that "price-sensitive shoppers have been trained to buy brands when they are ’on deal.’"

Bernstein said its previously positive thesis "is now broken," pointing to a perfect storm of surging milk protein concentrate and dry whey costs that will start hitting shake margins late in fiscal 2026 and persist into 2027, alongside rising freight costs that the firm believes will weigh more heavily on smaller manufacturers like BellRing than on larger rivals.

Similarly, BofA analysts see "limited visibility to a re-acceleration in either revenue or margins” over the near term.

They said competitive intensity continues to build, with aggressive promotions "raising the cost to defend BRBR’s leading market share," compounded by a decline in RTD shake buy rates and a deceleration in category growth from prior teen rates to around 8%, creating "a steeper path to restoring investor conviction."