Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), American Express, and United Continental

Analysts downwardly revised their ratings on AAPL, AXP, and UAL

by 1/15/2013 9:19 AM
Stocks quoted in this article:

Analysts are weighing in today on tech behemoth Apple Inc. (NASDAQ:AAPL - 501.75), credit card name American Express Company (NYSE:AXP - 61.21), and airline issue United Continental Holdings Inc (NYSE:UAL - 25.99). Here's a quick roundup of today's bearish brokerage notes.

  • On the heels of yesterday's demand-related decline, AAPL was slapped with a price-target cut to $530 from $660 at Nomura this morning. The equity has surrendered nearly 6% year-to-date, yet the sentiment scales among the brokerage bunch remain bullishly tipped. AAPL sports 32 "strong buys" and four "buy" recommendations, compared to just two "holds," and not a single "sell" rating. Also, despite today's price-target reduction, the security's average 12-month price target still stands at $731.96, reflecting expected upside of nearly 46% to Monday's closing price of $501.75.

  • With quarterly earnings scheduled for release after this Thursday's close, AXP was downgraded to "underweight" from "neutral" at J.P. Morgan Securities ahead of the opening bell. The stock has advanced about 23% during the last 12 months, yet short-term options players remain wary of AXP. The equity's Schaeffer's put/call open interest ratio (SOIR) checks in at 1.71, with puts nearly doubling calls among the front three-months' series of options. This ratio is just 4 percentage points shy of a yearly peak, meaning near-term traders have rarely been more bearishly biased toward the security over the past year.

  • Down nearly 2% in pre-market action, UAL was downgraded at J.P. Morgan Securities, as well, today. Despite a 52-week gain of 41%, the brokerage firm lowered its rating on the equity to "neutral" from "overweight." This pessimism toward UAL is also evident in the options pits. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 2.06, confirming puts bought to open have more than doubled calls during the last couple of weeks. This ratio ranks higher than 88% of similar readings taken within the past year, indicating traders have been picking up puts over calls at a faster-than-usual pace.

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