Analyst Downgrades: Facebook, InvenSense, Michael Kors

Analysts downwardly revised their ratings on FB, INVN, and KORS

Alex Eppstein
Oct 29, 2014 at 9:28 AM
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Analysts are weighing in today on Mark Zuckerberg's Facebook Inc (NASDAQ:FB), integrated circuit maker InvenSense Inc (NYSE:INVN), and apparel designer Michael Kors Holdings Ltd (NYSE:KORS). Here's a quick roundup of today's bearish brokerage notes on FB, INVN, and KORS.

  • FB was greeted this morning by a round of bearish brokerage notes, after warning of increased spending and slower revenue growth in 2015 -- and despite a third-quarter earnings beat. In fact, no fewer than a dozen analysts cut their price targets on the stock -- although Raymond James and Canaccord Genuity raised their respective targets to $84 and $88, while maintaining their "outperform" and "buy" opinions. Taking a step back, 29 out of 32 analysts following Facebook Inc have doled out a "buy" or "strong buy" endorsement, compared to three "holds" and not a single "sell" rating. At last check, the shares -- which are up nearly 48% in 2014 to trade at $80.77 -- are sitting roughly 6.5% lower in pre-market trading.

  • INVN is getting pummeled on and off the Street, following a fiscal second-quarter earnings miss. Specifically, six brokerage firms slashed their price targets on the shares, while Piper Jaffray and Pacific Crest also downgraded the stock to "neutral" and "sector perform," respectively. In fact, Piper Jaffray cut its price target by a steep $12 -- more than any of its peers -- to $17. As such, InvenSense Inc -- which closed yesterday 3.4% higher year-to-date at $21.48 -- looks poised to drop approximately 21% out of the gate. Elsewhere, options traders had been betting bearishly on the equity ahead of last night's earnings report. INVN's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.68 ranks in the 92nd percentile of its annual range.

  • Finally, KORS saw its fair value docked by $18 to $87 at Janney, which also lowered its rating to "neutral" from "buy." This comes as little surprise, considering the stock is down 3.7% year-to-date to trade at $78.17. Nevertheless, traders at the ISE, CBOE, and PHLX have been buying to open calls over puts at a rapid-fire rate in recent weeks. Specifically, Michael Kors Holdings Ltd's 10-day call/put volume ratio across those exchanges checks in at 2.92 -- or just 2 percentage points from an annual high.

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