Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), Research In Motion, and Amgen

Analysts downwardly revised their ratings on AAPL, RIMM, and AMGN

by 1/22/2013 9:21 AM
Stocks quoted in this article:

Analysts are weighing in today on tech behemoth Apple Inc. (NASDAQ:AAPL - 500.00), BlackBerry maker Research In Motion Limited (USA) (NASDAQ:RIMM - 15.84), and biotechnology company Amgen, Inc. (NASDAQ:AMGN - 82.08). Here's a quick roundup of today's bearish brokerage notes.

  • On the eve of reporting fiscal first-quarter earnings, AAPL received a price-target cut to $650 from $700 at UBS this morning. The security has shed about 6% year-to-date, yet short-term bulls remain undaunted. AAPL's Schaeffer's put/call open interest ratio (SOIR) stands at 0.55, indicating calls nearly double puts among the front three-months' series of options. In fact, this ratio is docked at an annual nadir, meaning near-term options players are more bullishly aligned toward the stock now than at any other time during the past 52 weeks.

  • Up more than 6% in pre-market trading, RIMM was downgraded to "hold" from "speculative buy" at Paradigm Capital today, although the brokerage firm also raised its price target to $19 from $14.50. Elsewhere, Scotia upped its rating on RIMM to "sector outperform" from "sector perform." These conflicting adjustments came on the heels of CEO Thorsten Heins hinting that RIMM may sell its handset business -- or license its software -- to rival smartphone companies down the road. The stock has climbed more than 33% so far this year, yet short interest on RIMM spiked by roughly 21% during the last two reporting periods. These shorted shares now account for more than 28% of the equity's float. This could translate into a contrarian boon for the stock, should these skeptics unwind their bearish bets in the near term.

  • Also due to report quarterly earnings tomorrow is AMGN, which was cut to "neutral" from "outperform" -- and saw its price target reduced to $90 from $100 -- at Credit Suisse ahead of the open. The equity has surrendered nearly 5% in 2013, yet call buying has been running rampant on AMGN, as reflected by its 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.52. This ratio is just 4 percentage points shy of a yearly peak, conveying traders have been snapping up calls over puts at a near annual-high pace.

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