Schaeffer's Trading Floor Blog

Analyst Downgrades: Broadcom Corporation, St. Jude Medical Inc., and Silver Wheaton Corp. (USA)

Analysts downwardly revised their ratings on BRCM, STJ, and SLW

by 5/28/2013 9:21 AM
Stocks quoted in this article:

Analysts are weighing in today on semiconductor name Broadcom Corporation (NASDAQ:BRCM), cardiovascular device manufacturer St. Jude Medical, Inc. (NYSE:STJ), and mining company Silver Wheaton Corp. (USA) (NYSE:SLW). Here's a quick roundup of today's bearish brokerage notes.

  • BRCM was downgraded to "neutral" from "positive" at Susquehanna in pre-market activity, which could chip away at the stock's year-to-date gain of about 10%. However, Broadcom Corporation -- which is presently priced at $36.59 -- has no shortage of fans among call buyers lately. In fact, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio is docked at 2.84. Or, in simpler terms, calls bought to open have nearly tripled puts during the past two weeks.

  • Despite a 2013 advance of nearly 25% to hover at $45.15, STJ was lowered to "sell" from "hold" at Canaccord Genuity ahead of the open. The stock has also outpaced the broader S&P 500 Index (SPX) on a relative-strength basis during the past two months, yet Schaeffer's put/call open interest ratio (SOIR) for St. Jude Medical Inc. stands at 1.26 -- confirming puts outnumber calls among the front-three months' series of options. This ratio ranks higher than 61% of comparable readings collected within the past year, signaling short-term traders are slightly more bearishly biased toward the stock than usual.

  • SLW -- which has shed about 37% so far this year -- received a price-target cut to $42 from $45 at CIBC today. Nevertheless, the sentiment scales among the analyst crowd remain optimistically slanted toward the equity. Silver Wheaton Corp. (USA) boasts eight "strong buys" and two "buy" recommendations, compared to one "hold" and not a single "sell" rating. Even more telling, the security's average 12-month price target of $38.93 denotes expected upside of more than 71% to Friday's closing price of $22.74. In other words, further downgrades and/or price-target cuts could be on the horizon for SLW.

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