Citi downgrades Cricut to Sell on ‘stiff headwinds’ to revenue

Citi downgraded Cricut (CRCT) to Sell from Neutral with a price target of $4, down from $6. The company’s revenue continues to face “stiff headwinds” on protracted demand normalization amid macro pressures on consumer spending and continued inventory cautiousness at retailers, the analyst tells investors in a research note. The firm says Cricut last quarter guided for significant investments to counter weakening engagement trends and accelerate pace of innovation in consumables to drive sales growth in the second half of the year. However, given a weak macro backdrop, Citi expects execution on these initiatives to be “further challenged,” especially given the discretionary nature of these purchases.