Analyst Downgrades: Twitter, Google, and Exxon Mobil

Analysts downwardly revised their ratings on TWTR, GOOGL, and XOM

Nov 3, 2014 at 9:28 AM
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Analysts are weighing in today on tech issues Twitter Inc (NYSE:TWTR) and Google Inc (NASDAQ:GOOGL), as well as oil-and-gas concern Exxon Mobil Corporation (NYSE:XOM). Here's a quick roundup of today's bearish brokerage notes on TWTR, GOOGL, and XOM.

  • TWTR received a pair of uninspiring analyst initiations in the wake of last week's steep sell-off. Specifically, Morgan Stanley started the shares with an "equal weight" rating and a price target of $42, while Monness Crespi Hardt initiated coverage with a "neutral" recommendation and a $40 price target. On Friday, the shares closed at $41.47 -- down 17% on the week -- and should the stock continue to struggle, there is more than enough room for another round of bearish brokerage notes. At present, 46% of those covering the shares maintain a "strong buy" rating, while the consensus 12-month price target of $51.97 stands at a 25% premium to the equity's current perch. In other news, Monster Worldwide, Inc. (NYSE:MWW) announced today it is launching a beta version of its recruitment platform on Twitter Inc.

  • Following in the footsteps of Monness Crespi Hardt, Morgan Stanley initiated coverage on GOOGL with an "equal weight" rating and a price target of $600 -- representing expected upside of less than 6% to the stock's current perch at $567.87. On the charts, Google Inc is sitting just 1.2% above its year-to-date breakeven line, yet option traders are keeping the faith. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.87 calls for each put during the past 10 sessions. Good news for those purchasing GOOGL's November-dated options -- the equity's Schaeffer's Volatility Index (SVI) of 20% ranks lower than all other readings taken over the past 12 months. In other words, the options market is pricing in the lowest volatility expectations of the year for GOOGL's front-month contracts.

  • On the heels of Friday's earnings-induced pop, XOM received mixed reviews from the brokerage bunch. J.P. Morgan Securities, for example, cut its price target on the shares to $98 from $101, while underscoring its "neutral" rating. Cowen and Company and Credit Suisse, on the other hand, raised their price targets to $108 and $100, respectively. Technically speaking, XOM is down 4.4% year-to-date to trade at $96.71, and has struggled to stage a move north of the century mark since July. Against this backdrop, option traders have taken the skeptical route, as evidenced by the equity's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.15, which ranks just 7 percentage points from an annual bearish peak. Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.97, which ranks higher than 61% of similar readings taken in the past year. Simply stated, short-term speculators are more put-skewed than usual. On the fundamental front, Exxon Mobil Corporation announced this morning it will be a founding member in MIT's Energy Initiative.
 

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