The hits keep coming for Sotera Health (SHC -10.73%), the beleaguered company that just suffered a stinging legal defeat. For the third day in a row, the company’s stock fell hard, diving by nearly 11%. This was due to yet another analyst lowering his recommendation on the shares.
JPMorgan Chase prognosticator Tycho Peterson weighed in with a new take on Sotera stock before market hours. To no one’s surprise, he has become notably more bearish on the company’s future due largely to those legal woes. He knocked his recommendation down two pegs, to underweight (sell, in other words) from the previous overweight (buy). Commensurately, he also radically reduced his price target to $9 per share from $26.
Peterson isn’t the only analyst scrambling to make adjustments to their takes on the healthcare company. His move comes a day after another high-profile bank, Goldman Sachs, reduced its recommendation on the stock, although this modification wasn’t as drastic. In Goldman’s case, analyst Amit Hazan lowered his to neutral from the preceding buy.
These come quickly on the heels of a major loss in an Illinois county court in which a jury awarded a plaintiff a $363 million payment from Sotera and two related businesses. The three had been accused by the plaintiff, Susan Kamuda, of causing breast cancer in herself and Hodgkin’s lymphoma in her son via emissions from a factory in the Chicago area.
Kamuda is only one of a multitude of parties suing Sotera and the pair of other businesses, one of which is the subsidiary (Sterigenics) that operated the facility. The future certainly looks challenging at the very least for the company due to the looming lawsuits, so the new analyst takes are entirely justified.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs. The Motley Fool has a disclosure policy.