Why is LinkedIn (LNKD) Stock Falling Today?

On Wednesday, shares of professional social networking site LinkedIn Corp LNKD are down 5.66% in midday trading after its stock was downgraded by Morgan Stanley to “Equal-Weight” from “Overweight.”

The firm believes the company faces numerous headwinds in the near future, and a slowdown in growth in enterprise and online talent solutions, with analysts saying "LinkedIn isn't likely to be as big of a platform as we previously thought."

In a note to investors, the team of analysts wrote that while they had been bullish on the stock in the past, LinkedIn had “potentially hit a wall with large enterprise customers.” Some of the company’s major products also seemed to be facing slower growth according to figures from its Q4 earnings.

“LinkedIn's ability to re-accelerate Talent Solutions growth and/or deliver better than expected results in B2B advertising, Lynda or Sales Navigator could reinvigorate investors and drive the stock back toward our bull case valuation ($200/share)," the analysts continued. "That said, continued faster than expected deceleration and/or mis-execution will likely cause the stock to be range-bound (best case) or trend toward our bear case valuation ($60/share)."

Morgan Stanley also cut its price target for LinkedIn to $125 from $190.

LNKD stock is now trading 60% below its all-time high of $276.18 on February 26, 2015.

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