Schaeffer's Trading Floor Blog

Analyst Downgrades: International Business Machines Corp., Wells Fargo & Co, and Salesforce.com, inc.

Analysts downwardly revised their ratings on IBM, WFC, and CRM

by 7/9/2013 9:22 AM
Stocks quoted in this article:

Analysts are weighing in today on tech concern International Business Machines Corp. (NYSE:IBM), financial services provider Wells Fargo & Co (NYSE:WFC), and cloud computing firm Salesforce.com, inc. (NYSE:CRM). Here's a quick roundup of today's bearish brokerage notes.

  • IBM -- which sports a modest year-to-date advance of just 1.8% to hover at $194.98 -- was downgraded to "neutral" from "buy" at Goldman Sachs this morning. Meanwhile, near-term calls seem to have an edge over their bearish counterparts lately. Schaeffer's put/call open interest ratio (SOIR) for International Business Machines Corp. stands at 0.94, indicating calls slightly outweigh puts among options with a shelf-life of three months or less. In fact, this ratio is just 6 percentage points above a yearly nadir, conveying short-term options players have rarely been more call-focused toward the security during the past 12 months.

  • As WFC prepares to report quarterly earnings this Friday, the stock was lowered to "neutral" from "positive" at Susquehanna today. (However, analysts at BMO upped their price target to $45 from $42.) Wells Fargo & Co has advanced more than 25% in 2013 to trade at $42.83 -- while also besting the broader S&P 500 Index (SPX) by north of 12 percentage points during the past two months -- yet put buyers remain undaunted. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.85 ranks higher than 73% of comparable annual readings, meaning traders have been scooping up puts over calls at an accelerated clip.

  • Down close to 9% so far this year, CRM saw its price target reduced to $40 from $42 at Wedbush Securities in pre-market activity. Nevertheless, Salesforce.com, inc. still has plenty of fans among the brokerage bunch. The stock currently boasts 23 "strong buys" and four "buy" recommendations, compared to four "holds" and one "strong sell" suggestion. Additionally, the equity's consensus 12-month price target of $48.76 reflects expected upside of about 26.9% from yesterday's closing price of $38.43. In other words, further downgrades and/or price-target cuts could be in the cards for CRM, which could pressure the shares lower.

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