Analyst Update: Alibaba, Agilent Tech, Seadrill

Analysts offered their two cents on Alibaba Group Holding Ltd, Agilent Technologies Inc, and Seadrill Ltd

Nov 4, 2014 at 3:10 PM
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U.S. stocks are mixed at midday, as traders sit on the sidelines ahead of tomorrow's European Central Bank (ECB) meeting and Friday's highly anticipated nonfarm payrolls report. Among equities attracting the attention of analysts are Alibaba Group Holding Ltd (NYSE:BABA) -- also known as "China's Amazon" -- diagnostics firm Agilent Technologies Inc (NYSE:A), and offshore drilling contractor Seadrill Ltd (NYSE:SDRL).

  • BABA is up 2.8% at $104.60 -- and earlier touched a record high of $105.21 -- thanks to a well-received inaugural earnings report. Analysts are applauding Alibaba Group Holding Ltd's reported 54% surge in revenue during the most recent quarter, with Wedbush lifting its price target by $10 to $115 and underscoring an "outperform" endorsement. "We believe revenue growth should remain high as Singles Day" -- Nov. 11 (or 11/11), China's biggest online shopping day -- "continues to gather steam," the brokerage firm wrote. Elsewhere, Cantor Fitzgerald hiked its price target on BABA to $110 from $90, and lifted its fiscal-2015 revenue projections, while Susquehanna upped its target by $10 to $120 and reiterated a "positive" rating. Outside of the analyst community, recent BABA option buyers are likely in celebration mode, as calls were the distinct contracts of choice leading up to this morning's turn in the earnings spotlight. (As for rival, Inc., however, traders are less optimistic.)

  • A is down 1.5% at $40.21, paring a portion of Monday's litigation-inspired boost. No fewer than three brokerage firms downwardly revised their opinions of Agilent Technologies Inc, with Citigroup cutting its price target to $40 from $45.77 and reiterating a "neutral" stance. Meanwhile, Wells Fargo downgraded A to "market perform" from "outperform," and R.W. Baird cut its rating to "neutral" from "outperform" and slashed its target to $42 from $59. In the options pits, it looks like one trader may be swapping A shares for options ahead of the company's quarterly earnings release later this month, initiating a synthetic long stock position at the February 37.50 put and 42.50 call, according to Trade-Alert.

  • Finally, SDRL is down 7.3% at $20.64 -- and fell to a four-year low of $20.33 earlier -- as offshore drillers swoon in sympathy with oil futures. In addition, traders are digesting Seadrill Ltd's sale of the West Vela drillship to a subsidiary of Seadrill Partners, as well as a negative note from Zephirin Group's Longdley Zephirin, who predicted an extended period of waning demand for the offshore drilling sector. On the charts, SDRL has now shed half of its value in 2014, and could be vulnerable to a flood of price-target cuts. The current consensus 12-month price target of $33.18 represents expected upside of almost 61% to SDRL's price.

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