Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), VMware, and Molycorp

Analysts downwardly revised their ratings on AAPL, VMW, and MCP

by 1/28/2013 9:19 AM
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Analysts are weighing in today on tech titan Apple Inc. (NASDAQ:AAPL - 439.88), virtualization concern VMware, Inc. (NYSE:VMW - 99.00), and rare-earths issue Molycorp Inc (NYSE:MCP - 95.58). Here's a quick roundup of today's bearish brokerage notes.

  • The hits just keep coming for AAPL, with analysts at Baird cutting the stock to "neutral" from "buy" ahead of the bell. In addition, the brokerage firm slashed its price target to $465 from $570, and said consensus estimates remain high for AAPL, leaving the shares vulnerable -- especially with "gross margin concerns likely to linger." In fact, AAPL does remain in danger of additional downgrades, with 36 out of 39 analysts maintaining "buy" or better ratings, and not one offering up a "sell" or worse suggestion. After last week's disappointing turn in the earnings confessional, the shares of AAPL are trading in territory not charted in over a year.

  • Elsewhere, VMW was downgraded to "neutral" from "buy" at Lazard Capital. The negative note is relatively rare for the stock, which boasts 16 "strong buys" and three "buy" ratings, compared to 12 lukewarm "holds" and not a single "sell" recommendation. Technically speaking, the shares have added about 5.2% so far in 2013, but have run into a round-number speed bump at the century mark -- a level not conquered since mid-to-late September.

  • Finally, CIBC trimmed its price target on MCP to $16 from $17. The shares have underperformed the broader S&P 500 Index (SPX) by nearly 30 percentage points during the past three months, and last week slumped after announcing a stock offering and warning of ebbing sale prices for rare metals. Against this backdrop, it's not surprising to find most of the Street wary of MCP, with short interest representing more than a week's worth of pent-up buying demand, at MCP's average pace of trading. In the same vein, the security's Schaeffer's put/call open interest ratio (SOIR) stands at a 52-week peak of 0.93, implying that short-term options players haven't been more put-heavy at any other time during the past year.

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