Darden Restaurants raised questions about the health of the consumer this week, after it warned that sales were softening. Rachael Rothman, an analyst with Susquehanna Financial Group, noted that she's seeing broad weakening in hospitality-related stocks, including gaming, hotel, cruise line and restaurant companies.
"So in each of our four sectors, we've either seen the pace of gains slow or the pace of declines steepen," Rothman said. Macroeconomic trends from the consumer are not strong and even hotel demand is weakening, she added.
Although Zynga shares soared on Thursday following the company's announcement that it has filed an application for a Nevada gaming license, Ken Sena, an internet analyst at Evercore Partners, still said he believes the stock remains risky.
"There is the potential for more value there so I'm not necessarily saying that this a short, but we still do continue to see this as sort of a risky bet so we are underweight on it," he said.
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