Analyst Downgrades: Micron, Cisco, and Hewlett-Packard

Analysts downwardly revised their ratings on Micron Technology, Inc. (MU), Cisco Systems, Inc. (CSCO), and Hewlett-Packard Company (HPQ)

Aug 17, 2015 at 9:43 AM

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Analysts are weighing in today on semiconductor issue Micron Technology, Inc. (NASDAQ:MU), blue chip Cisco Systems, Inc. (NASDAQ:CSCO), and computer hardware firm Hewlett-Packard Company (NYSE:HPQ). Here's a quick roundup of today's bearish brokerage notes on MU, CSCO, and HPQ.

Following late-Friday news that -- unlike Apple Inc. (NASDAQ:AAPL) -- Appaloosa Management has dissolved its stake in MU, the shares are facing a rush of negative attention. Specifically, BofA-Merrill Lynch and Wedbush downgraded their opinion to "neutral," while the latter slashed its price target to $19 from $26. Topeka Capital and Cowen and Company, likewise, lowered their price targets to $27 and $28, respectively. On the flip side, Wells Fargo boosted its opinion on Micron Technology, Inc. to "market perform" from "underperform." Technically speaking, the stock has been brutalized in 2015, losing more than half its value to trade at $16.40 -- and tagging a fresh annual low of $16.12 out of today's gate. Additional negative notes could be forthcoming, considering 20 of 27 analysts maintain "buy" or better ratings on the chronic underperformer. Plus, MU's consensus 12-month price target of $28.57 stands in territory not charted since late May, hinting at eventual price-target cuts.

Despite being up almost 4% year-to-date at $28.58 -- and posting strong quarterly numbers last week -- CSCO saw its rating cut to "equal weight" from "overweight" at Morgan Stanley. Specifically, the brokerage firm said it thinks the company's "resumption of growth is from a product refresh, something the valuation has largely incorporated." Short-term option players, however, have been extremely call-skewed toward Cisco Systems, Inc. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.40 ranks in the low 3rd percentile of its annual range.

HPQ has struggled in 2015, losing more than 29% of its value to trade at $28.31, and this morning touching an annual low of $28.28. Over the weekend, BMO took note of this technical weakness, trimming its price target to $35 from $38. Considering over half of the analysts tracking Hewlett-Packard Company still maintain "buy" or better ratings, the future could contain downgrades. Likewise, the stock's consensus 12-month price target of $40.12 -- territory not charted since late January -- means additional price-target cuts could be forthcoming. This is especially true if HPQ disappoints this Thursday evening, when it's scheduled to take its turn in the earnings confessional.

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