Schaeffer's Trading Floor Blog

Analyst Downgrades: Microsoft, Oracle, and Ford

Analysts downwardly revised their ratings on MSFT, ORCL, and F

by 1/25/2013 9:20 AM
Stocks quoted in this article:

Analysts are weighing in today on software concerns Microsoft Corporation (NASDAQ:MSFT - 27.63) and Oracle Corporation (NASDAQ:ORCL - 34.94), along with automaker Ford Motor Company (NYSE:F - 13.87). Here's a quick roundup of today's bearish brokerage notes.

  • Off about 1% in pre-market action, MSFT received price-target cuts at Barclays (to $29 from $30) and Bernstein (to $37 from $38) this morning, after reporting a 3.7% drop in fiscal second-quarter earnings post-close yesterday. However, there are still plenty of analysts taking up residence in the stock's bullish camp. The equity boasts 18 "buy" or better endorsements, versus 12 "holds," and not a single "sell" recommendation. This leaves the door open for future downgrades, which could pressure the shares lower.

  • Despite a year-over-year advance of roughly 24%, ORCL was cut to "buy" from "conviction buy" at Goldman Sachs today. Meanwhile, options players seems to prefer calls over their bearish counterparts, as evidenced by the security's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.26. This ratio ranks higher than 56% of other such readings taken within the past year, reflecting a slightly healthier-than-usual appetite for calls over puts.

  • With quarterly earnings scheduled for Tuesday morning, F was downgraded to "equal weight" from "overweight" at Barclays ahead of the open. Elsewhere, however, short-term options traders have high hopes for F. Schaeffer's put/call open interest ratio (SOIR) for F sits at 0.54, signaling calls almost double puts among the front three-months' series of options. This ratio ranks in the 33rd percentile of its annual range, indicating near-term traders have been more bullishly aligned toward the equity just one-third of the time during the last 52 weeks.

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