Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), International Business Machines Corp., and Microsoft Corporation

Analysts downwardly revised their ratings on AAPL, IBM, and MSFT

by 4/19/2013 9:26 AM
Stocks quoted in this article:

Analysts are weighing in today on tech behemoth Apple Inc. (NASDAQ:AAPL), computer concern International Business Machines Corp. (NYSE:IBM), and software issue Microsoft Corporation (NASDAQ:MSFT). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 26% so far this year to hover at $392.05, AAPL saw its price target cut to $465 from $530 at Barclays this morning, just days before the firm takes its turn in the earnings confessional. The stock has also underperformed the broader S&P 500 Index (SPX) by about 26 percentage points during the past three months, yet near-term traders remain upbeat toward Apple Inc. The equity's Schaeffer's put/call open interest ratio (SOIR) sits at 0.50, confirming calls double puts among the front three-months' series of options. In fact, this ratio is just 1 percentage point above a yearly nadir, meaning short-term options players have rarely been more bullishly aligned toward AAPL during the last 12 months.

  • IBM -- which is up about 8% year-to-date to trade at $207.15 -- was hit with a round of downbeat analyst adjustments after reporting weaker-than-expected quarterly earnings following yesterday's close. Deutsche Bank lowered its price target to $225 from $240, while Stifel Nicolaus, BMO, and J.P. Morgan Securities also slashed their respective price targets. Elsewhere, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day put/call volume ratio of 1.52 ranks higher than 95% of similar annual readings, signaling speculators have rarely picked up International Business Machine Corp. puts over calls at a faster clip during the past year.

  • Also fresh out of the earnings confessional is MSFT, which received a downward price-target adjustment at Oppenheimer (to $34 from $36) ahead of the opening bell. The equity is down more than 7% on a year-over-year basis, yet the sentiment scales among the brokerage bunch remain bullishly tipped. Microsoft Corporation boasts 14 "strong buys" and two "buy" endorsements, compared to 13 "holds" and not a single "sell" suggestion. What's more, the stock's average 12-month price target of $32.58 reflects expected upside of about 13% to yesterday's closing price of $28.79. In other words, an additional round of downgrades and/or price-target cuts could pressure the shares lower.

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