Analyst Downgrades: SanDisk, Abbott Labs, ChannelAdvisor

Analysts downwardly revised their ratings on SanDisk Corporation (SNDK), Abbott Laboratories (ABT), and ChannelAdvisor Corp (ECOM)

Jan 13, 2015 at 9:21 AM
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Analysts are weighing in today on flash memory expert SanDisk Corporation (NASDAQ:SNDK), pharmaceutical firm Abbott Laboratories (NYSE:ABT), and enterprise software provider ChannelAdvisor Corp (NYSE:ECOM). Here's a quick roundup of today's bearish brokerage notes on SNDK, ABT, and ECOM.

  • After estimating weaker-than-expected fourth-quarter sales yesterday and consequently losing nearly 14% to settle at $83.57, SNDK received a rush of negative analyst attention. No fewer than nine brokerage firms reduced their price targets on the stock, while Needham downgraded SanDisk Corporation to "hold" from "buy." Despite Monday's losses, shares of the chipmaker remain more than 17% higher on a year-over-year basis. As such, 19 out of 22 covering analysts rate SNDK a "buy" or better, compared to three "holds" and not a single "sell." Also, the equity's consensus 12-month price target of $107.89 represents a 29.1% premium to current trading levels. Additional downgrades and/or price-target cuts could drag the security even lower. Looking ahead, SNDK will report fourth-quarter earnings next Wednesday night.

  • Jefferies downgraded ABT to "hold" from "buy," and reduced its price target by $2 to $50. This is somewhat surprising, given the shares' 16.5% year-over-year advance to perch at $45.34 -- just a chip-shot away from their record high of $46.50, touched in late December. While Jefferies may be skeptical of Abbott Laboratories, this is hardly true of options traders. During the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has racked up a call/put volume ratio of 12.78 -- in the 86th percentile of its annual range.

  • Finally, ECOM reduced its fourth-quarter revenue guidance last night, and the brokerage bunch has responded in force. Specifically, Baird, Stifel, and Raymond James all downgraded the stock to the equivalent of a "hold" from a "buy." Additionally, Baird slashed its price target on ChannelAdvisor Corp to $18 from $32, and Needham cut its target to $22 from $30, while reiterating a "buy" opinion. Accordingly, ECOM shares are pointed roughly 47% lower ahead of the bell, which would add to their year-over-year deficit of 54.2% -- as of last night's close at $21.15. Short sellers have reacted strongly to this longer-term swoon, as short interest rose nearly 15% during the most recent reporting period. Currently, 18.5% of the equity's float is sold short, which would take 12 days to cover, at typical daily trading volumes.
 

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