Figs stock falls after Goldman Sachs downgrades to ‘Sell’

andresr/E+ via Getty Images

Shares of Figs Inc. (NYSE:FIGS) slid on Thursday after Goldman Sachs revised its rating to “Sell”.

The bank’s analysts explained that a downgrade from “Neutral” to sell was appropriate given macroeconomic conditions and a likely overoptimistic consensus on Wall Street.

“We believe near-term demand headwinds will be larger and more pronounced than consensus expectations, driving moderating top line growth,” the downgrade note explained. “While we remain constructive on the FIGS brand and continue to see it as a leader in the premium scrubwear category, we believe that inflationary pressures on the consumer may result in deferred or reduced demand for FIGS’s premium and long-lasting product.”

In short, its premium pricing may hurt the stock as consumers trade down to cheaper, private label options.

Shares of the California-based healthcare apparel brand fell 7.71% in Thursday’s premarket session.

Read more on why Raymond James is bullish on the name.