Schaeffer's Trading Floor Blog

Analyst Update: Cisco Systems, Inc., QLogic Corporation, and Illumina, Inc.

Analysts adjust their ratings on CSCO, QLGC, and ILMN

by 8/4/2014 1:17 PM
Stocks quoted in this article:

Analysts are weighing in today on networking specialists Cisco Systems, Inc. (NASDAQ:CSCO) and QLogic Corporation (NASDAQ:QLGC), as well as biotech concern Illumina, Inc. (NASDAQ:ILMN). Here's a quick look at today's brokerage notes on CSCO, QLGC, and ILMN.

  • CSCO is edging its way north this afternoon -- up 0.4% at $25.09 -- after Baird raised its price target on the stock to $29 from $27. Overall, sentiment among the brokerage bunch has been mixed toward CSCO. While roughly 62% of covering analysts maintain a "buy" or better rating on the equity, the consensus 12-month price target of $25.87 stands at a slim 3% premium to current trading levels. With Cisco Systems, Inc. slated to step up to the earnings plate next Wednesday evening, a reaction to either side could prompt a re-evaluation of ratings among analysts, which may help to fuel the equity's post-earnings trajectory.

  • QLGC sunk to a new 52-week low of $8.89 earlier, after Barclays downgraded the stock to "equal weight" from "overweight," and reduced its price target by $3 to $10. Today's negative price action only highlight's the equity's withstanding troubles, with the shares off about 32% from their April 3 annual high of $13.06 to churn near $8.92. In spite of this downtrend, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 44.32 ranks in the 87th percentile of its annual range. Simply stated, calls have been bought to open over puts at a near-annual-high clip in recent months. An unwinding of these bullish bets in the face of QLogic Corporation's continued struggles could create additional headwinds for the security.

  • Goldman Sachs raised its price target on ILMN to $187 from $184 -- and maintained its "neutral" rating -- yet the stock is failing to capitalize on this bullish brokerage attention. At last check, the equity was off 0.9% to trade at $159.37, but still remains 44% higher year-to-date. On the sentiment front, short sellers have been exiting their positions in droves, with short interest down 55.3% over the past two reporting periods. In fact, the 4.59 million shares of Illumina, Inc. that are currently sold short represent the fewest number of shorted ILMN shares since November 2005.

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