Schaeffer's Trading Floor Blog

Analyst Downgrades: NVIDIA, Chipotle Mexican Grill, and Google

Analysts downwardly revised their ratings on NVDA, CMG, and GOOG

by 10/19/2012 9:10 AM
Stocks quoted in this article:

Analysts are weighing in today on graphic chip maker NVIDIA Corporation (NASDAQ:NVDA - 12.86), quick-service restaurant Chipotle Mexican Grill, Inc. (NYSE:CMG - 285.93), and Internet search engine Google Inc (NASDAQ:GOOG - 695.00). Here's a quick roundup of today's bearish brokerage notes.

  • NVDA was downgraded to "market perform" from "outperform" at FBR Capital Markets ahead of the open, which could exacerbate the stock's year-over-year loss of nearly 11%. Despite the equity's technical woes, calls are still ruling the options pits. The security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 6.75, confirming traders have bought to open almost seven calls for every put during the past two weeks. This ratio arrives in the 79th annual percentile, denoting a stronger-than-usual preference for bullish bets over bearish.

  • Down nearly 13% in pre-market action, CMG was cut to "neutral" from "outperform" and saw its price target slashed to $270 from $350 at Wedbush today, after the company revealed third-quarter earnings that fell short of analysts' expectations. The stock also received downward price-target adjustments at Barclays and Jefferies. With a year-to-date decline of more than 15%, it stands to reason that skeptics have been converging on the equity. Short interest on CMG rose by 4% during the past month, and now accounts for roughly 11% of the security's float. It would take nearly a week to buy back these shorted shares, at the stock's average pace of trading.

  • GOOG was flooded with a bounty of bearish attention this morning, thanks to Thursday's disappointing quarterly earnings results. Specifically, Susquehanna lowered its price target to $800 from $880, while Baird, Raymond James, Piper Jaffray, RBC, Nomura, BMO, Evercore, Canaccord Genuity, and Cantor Fitzgerald also issued price-target cuts. Nevertheless, the majority of analysts covering the security -- which has added about 19% on a year-over-year basis -- still harbor high expectations for GOOG. The equity currently sports 27 "strong buys" and three "buy" endorsements, compared to three "holds" and zero "sell" suggestions.

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