Schaeffer's Trading Floor Blog

Analyst Downgrades: Dell, Wal-Mart, and JetBlue Airways

Analysts downwardly revised their ratings on DELL, WMT, and JBLU

by 11/16/2012 9:31 AM
Stocks quoted in this article:

Analysts are weighing in today on computer giant Dell Inc. (NASDAQ:DELL - 9.56), broadline retailer Wal-Mart Stores, Inc. (NYSE:WMT - 68.72), and low-cost carrier JetBlue Airways Corporation (NASDAQ:JBLU - 5.03). Here's a quick roundup of today's bearish brokerage notes.

  • Off roughly 3% in pre-market trading, DELL was hammered with bearish attention this morning, after revealing third-quarter earnings that fell short of analysts' projections. Specifically, Baird cut its price target to $11 from $14, while J.P. Morgan, Barclays, Evercore Partners, Credit Suisse, BMO, FBN, UBS, and Raymond James also downwardly revised their respective price targets. The equity has shed about 36% from the year-ago period, which could explain why most of the analysts covering the security maintain a cautious stance toward DELL. The stock sports 11 "buy" or better ratings, versus 14 tepid "holds" and one "strong sell" suggestion.

  • WMT saw its price target lowered to $75 from $82 at Bernstein today, after reporting weaker-than-expected quarterly revenue yesterday. The security has gained more than 21% on a year-over-year basis, which may have been attracting call players of late. The stock's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 1.15. In other words, calls bought to open have outstripped puts during the past four weeks.

  • JBLU was downgraded to "sell" from "neutral" at Goldman Sachs ahead of the open, after the company warned that the aftermath of Hurricane Sandy will likely reduce October and November operating income by around $25 million to $30 million. The stock has gained nearly 36% during the past year, while also besting the broader S&P 500 Index (SPX) by 10 percentage points over the past 40 sessions. Nevertheless, short interest currently accounts for more than 16% of the equity's available float. It would take 14 days to unwind these bearish bets, at the security's average pace of trading.

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