Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), Yahoo!, and Baidu

Analysts downwardly revised their ratings on AAPL, YHOO, and BIDU

by 1/7/2013 9:30 AM
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Analysts are weighing in today on tech giant Apple Inc. (NASDAQ:AAPL - 527.00), Internet concern Yahoo! Inc. (NASDAQ:YHOO - 19.86), and Chinese search engine, Inc. (ADR) (NASDAQ:BIDU - 104.65). Here's a quick roundup of today's bearish brokerage notes.

  • As AAPL prepares to report fiscal first-quarter earnings on Jan. 23, the equity was slapped with a price-target cut to $740 from $800 at Barclays this morning. The stock has climbed nearly 25% during the past year, which could explain the bounty of call activity occurring in the short-term options pits. Schaeffer's put/call open interest ratio (SOIR) for AAPL sits at 0.69, signaling calls outpace puts among the front three-months' series of options. This ratio arrives in the 18th percentile of its annual range, meaning near-term traders have rarely been more optimistically aligned toward the security over the last 52 weeks.

  • Also on deck to report quarterly earnings later this month is YHOO, which was downgraded to "market perform" from "outperform" at Bernstein ahead of the open despite the security's year-over-year gain of 28% and recent new annual high. Meanwhile, YHOO's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 5.66, confirming traders have bought to open more than five calls for every put during the past two weeks. This ratio ranks higher than 76% of comparable readings collected within the last 12 months, denoting a healthier-than-usual appetite for bullish options over bearish.

  • Down roughly 3% in pre-market trading, BIDU was lowered to "equal weight" from "overweight," and saw its price target reduced to $113 from $137 at Barclays this morning. The brokerage firm claims to see potential downside in the Chinese company's recent advertising agreement with Google Inc (NASDAQ:GOOG). The equity has shed approximately 14% over the last 52 weeks -- while also trailing the broader S&P 500 Index (SPX) by more than 9 percentage points during the past 60 sessions -- yet most of the covering analysts continue to hold the security in high regard. The stock currently sports 10 "buy" or better recommendations, compared to four "holds," and zero "sells." This leaves BIDU vulnerable to future downgrades, which could pressure the shares lower.

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