Cardlytics downgraded to Underperform from Neutral at BofA

BofA analyst Omar Dessouky downgraded Cardlytics to Underperform from Neutral with a price target of $3.50, down from $4. The firm is turning more cautious on the stock amid increased macro uncertainties and low visibility into CY24 growth and profitability, telling investors that concerns over a potentially slowing economy have reemerged after recent economic releases, with several AdTech companies having factored the risk of a softer ad spend environment into their forward outlook. An ad pullback, if materialized, could disproportionately impact smaller ad platforms like Cardlytics, where some spend is experimental in nature, and BofA does not have confidence that Cardlytics’ core user targeting model will start to deliver against ad budgets in a consistent, predictable fashion in the near-term.