Schaeffer's Trading Floor Blog

Analyst Downgrades: JPMorgan Chase & Co., Microsoft Corporation, and 3D Systems Corporation

Analysts downwardly revised their ratings on JPM, MSFT, and DDD

by 4/14/2014 9:24 AM
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Analysts are weighing in today on financial firm JPMorgan Chase & Co. (NYSE:JPM), tech guru Microsoft Corporation (NASDAQ:MSFT), and 3D printing technology manufacturer 3D Systems Corporation (NYSE:DDD). Here's a quick roundup of today's bearish brokerage notes.

  • Analysts continue to bombard JPM in the wake of Friday's weaker-than-expected first-quarter earnings report, which sent the shares 3.7% lower to $55.30. This morning, no fewer than five brokerage firms have doled out price-target cuts on the stock, including UBS and Bernstein, which each slashed their targets by $2, to $63 and $65, respectively. There's still plenty of room on JPMorgan Chase & Co.'s bearish bandwagon, however. The stock boasts 17 "buy" or better recommendations, compared to four "holds" and just one "sell." Meanwhile, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.67 stands higher than just 22% of comparable readings from the past year, suggesting short-term options players are more call-skewed than usual right now.

  • Deutsche Bank downgraded MSFT to "hold" from "buy" this morning. However, the security -- which has outperformed the broader S&P 500 Index (SPX) by 8 percentage points during the past three months -- is no stranger to skepticism. The stock has added 4.8% in 2014, and touched a near-14-year high of $41.66 earlier this month, yet more than half of covering analysts maintain "hold" or "sell" opinions. Plus, the consensus 12-month price target on the shares sits at $39.60 -- just a hair's breadth from the stock's current perch of $39.21. Should Microsoft Corporation extend its uptrend, or should the company report stronger-than-expected earnings after the close on Thursday, April 24, a reversal in sentiment on Wall Street could translate into contrarian gains for the shares.

  • Finally, Goldman Sachs this morning initiated coverage of DDD with a tepid "neutral" rating. However, the brokerage firm issued a price target of $63 for the shares, representing expected upside of 31% from the stock's current price of $48.07. Speculators are taking the glass-half-full approach in pre-market trading, sending DDD 1.8% higher ahead of the bell. From a longer-term perspective, the stock is currently lingering in year-to-date-low territory, but a bounce could be in the cards. The security finished the past two sessions south of its lower Bollinger Band, signaling "oversold" territory. Should 3D Systems Corporation stage a recovery, a short-squeeze situation could add contrarian fuel to the stock's fire. Short interest grew 10.4% during the past two reporting periods, and now accounts for 27.5% of the stock's total available float -- or roughly six sessions worth of pent-up buying demand, at DDD's average pace of trading.

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