Citi Just Downgraded Bill Ackman's Pershing Square Stock to Sell, Citing a $45 Price Target Versus Its $60 Peak. Is PS Stock Overvalued After Its April IPO Rally?

Pershing Square (PS) is down 25% from its October peak of $60 to $45 after Citi and Bank of America downgraded the stock to sell/underperform, flagging valuation at 54x forward earnings.

Both firms also cut earnings projections. The stated reasons: tepid investment performance and modest expected returns. Citi's downgrade carries a $45 price target, which sits right at the current price, implying the analysts see little room for upside from here.

The pullback follows a sharp run. Even after the drop, PS remains up 87% since its April IPO, so the stock still carries a substantial gain for anyone who bought near the offering.

Interpretation: a 54x forward earnings multiple leaves little margin for error. When two major banks cite weak investment performance and then lower earnings estimates, the denominator in that multiple shrinks while the price stays elevated. That combination typically pressures valuation, and the 25% slide suggests the market is already repricing. Whether $45 marks a floor or a pause is the open question, since Citi's target equals the current price rather than pointing to a further leg down.

Note that BRK.A, BRK.B, and HHH are not named in the source's analyst actions, so the downgrades should not be read as a call on those names.