Shares of GoPro Inc. are down 2.2% in midday trading Tuesday after analysts at Morgan Stanley downgraded the stock to underweight from equal weight. The analysts, led by Yuuji Anderson, warned that GoPro could be in for a “long year ahead” given “limited earnings power” and weak demand for its new camera line. Anderson addressed media reports saying that GoPro may be working with an investment bank on evaluating the potential for a sale, writing that he doesn’t have knowledge of any such moves but that they wouldn’t seem to make sense. “We think the market is giving too much credit for the potential strategic value of the company given its current earnings power,” he wrote. “Whether by itself or within another ecosystem, GoPro’s value is tied to its usability, and its earnings power remains at risk at the current pace of functional improvements.” Anderson lowered his price target on the stock to $5 from $9.50. GoPro shares have fallen 35% over the past 12 months, compared with a 25% rise for the S&P 500 Index .
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