Schaeffer's Trading Floor Blog

Analyst Downgrades: Nokia Corporation (ADR), Caterpillar Inc., and Cirrus Logic, Inc.

Analysts downwardly revised their ratings on NOK, CAT, and CRUS

by 4/17/2013 9:39 AM
Stocks quoted in this article:

Analysts are weighing in today on mobile phone maker Nokia Corporation (ADR) (NYSE:NOK), software concern Caterpillar Inc. (NYSE:CAT) and tech concern Cirrus Logic, Inc. (NASDAQ:CRUS). Here's a quick roundup of today's bearish brokerage notes.

  • Down almost 13% year-to-date to hover at $3.44, NOK saw its price target trimmed to $4.50 from $5 by RBC ahead of the opening bell, as the company prepares to report first-quarter earnings tomorrow. Despite this weak price action, call buying has been flourishing on Nokia Corporation (ADR). The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 3.66, indicating calls bought to open have more than tripled puts during the past couple of weeks. This ratio is just 5 percentage points from a yearly peak, meaning traders have been snapping up calls over puts at a near annual-high pace.

  • CAT -- which has surrendered close to 24% during the last 12 months -- was downgraded to "neutral" from "outperform" at Macquarie this morning, while analysts at Jefferies slashed their price target to $75 from $95. However, the sentiment scales among the brokerage bunch are still bullishly skewed toward Caterpillar Inc. The stock currently boasts 10 "strong buys" and one "buy" endorsement, compared to nine "holds" and not a single "sell" suggestion. What's more, the security's average 12-month price target of $106.74 represents expected upside of about 29.2% from its current perch at $82.61. This leaves the door wide open for further downgrades and/or price-target cuts down the road, which could exacerbate CAT's technical troubles.

  • CRUS was hammered with bearish attention today, after the firm said its fourth-quarter margins will be hit by a hefty inventory reserve charge, and issued a lackluster first-quarter revenue outlook. Needham Research cut the stock to "buy" from "strong buy," and shaved its price target to $30 from $45, while Stifel Nicolaus, Sterne Agee, and Canaccord Genuity downwardly revised their respective price targets. The stock has shed about 26% year-to-date to trade at $21.41 -- while also lagging the broader S&P 500 Index (SPX) by roughly 34 percentage points during the past three months -- yet no fewer than six analysts have deemed Cirrus Logic, Inc. worthy of a "strong buy" rating, versus two "holds" and zero "sell" recommendations. In other words, further downgrades and/or price-target cuts could be in the cards for CRUS.

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