Analyst Downgrades: DreamWorks, SunPower, Glu Mobile

Analysts downwardly revised their ratings on DWA, SPWR, and GLUU

Oct 30, 2014 at 9:23 AM
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Analysts are weighing in today on movie studio DreamWorks Animation SKG, Inc. (NASDAQ:DWA), alternative energy concern SunPower Corporation (NASDAQ:SPWR), and mobile game maker Glu Mobile Inc. (NASDAQ:GLUU). Here's a quick roundup of today's bearish brokerage notes on DWA, SPWR, and GLUU.

  • DWA is pointed 1.8% higher ahead of the bell, after the firm said the blockbuster performance of "How to Train Your Dragon 2" translated into stronger-than-expected third-quarter earnings. Nevertheless, Janney downgraded DWA to "neutral" from "buy," echoing the already bearish tone among the brokerage bunch. In fact, DreamWorks Animation SKG, Inc. boasts just one "strong buy," compared to six tepid "holds" and two "sell" or worse ratings. Likewise, the consensus 12-month price target of $22.22 represents a discount to DWA's closing price of $23.29 on Wednesday. Short-term option players, on the other hand, are likely applauding the earnings beat. The stock's Schaeffer's put/call open interest ratio (SOIR) sits at an annual low of 0.42, suggesting DWA's near-term traders haven't been more call-heavy during the past year.

  • SPWR is flirting with breakeven at $30.31 in pre-market action, even as analysts continue to react to yesterday's lackluster earnings guidance. Specifically, Cowen cut its price target to $46 from $50, but maintained an "outperform" rating, while RBC trimmed its price target by $1 to $35, and reiterated a "sector perform" opinion. (Canaccord Genuity, meanwhile, upgraded SPWR to "buy" from "hold.") In the options pits, SunPower Corporation traders were picking up puts over calls at an annual-high pace ahead of earnings, as the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at a 12-month high of 2.20. The stock's post-earnings reaction was relatively tame, however, as the shares dipped just 1.7% Wednesday, and remain in the black on a year-to-date basis.

  • Finally, GLUU is poised to plummet 16% out of the gate, as analysts pan the company's current-quarter forecast. Canaccord Genuity reduced its price target on the stock to $6 from $8, but upheld a "buy" rating, while Piper Jaffray cut its target to $5 from $7, while maintaining an "overweight" opinion. As of last night, the shares of Glu Mobile Inc. were up 16.8% year-to-date to trade at $4.53, but were struggling to topple their 50-week moving average. More negative analyst notes could exacerbate post-earnings selling pressure on the stock, which boasts six "strong buys" and two "holds," with not a single "sell" in sight. Plus, the consensus 12-month price target of $7.82 represents a steep premium to GLUU's current price.
 

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