Analyst Downgrades: IBM, BP, and QUALCOMM

Analysts downwardly revised their ratings on International Business Machines Corp. (IBM), BP plc (ADR) (BP), and QUALCOMM, Inc. (QCOM)

Jan 16, 2015 at 9:26 AM
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Analysts are weighing in today on blue chip International Business Machines Corp. (NYSE:IBM), oil-and-gas issue BP plc (ADR) (NYSE:BP), and digital communications expert QUALCOMM, Inc. (NASDAQ:QCOM). Here's a quick roundup of today's bearish brokerage notes on IBM, BP, and QCOM.

  • IBM saw its price target cut to $160 from $170 at RBC, which also reiterated its "sector perform" assessment. This negative analyst note isn't surprising, given the stock's 18.1% year-over-year slide to land at $154.57. Indeed, 13 of the 17 brokerage firms covering International Business Machines Corp. rate it a "hold" or worse, and its consensus 12-month price target of $165.38 stands at a 7% premium to current trading levels. More downside could be on the way, too, with IBM slated to step into the earnings confessional next Tuesday night. Following the company's most recent quarterly event in October, the shares lost 7.1% in the subsequent session.

  • BP is pointed 3.2% higher ahead of the bell, despite a round of bearish brokerage notes. Specifically, Canaccord Genuity and S&P Capital IQ both lowered their ratings on the equity to "hold" from "buy." Additionally, the two aforementioned firms -- as well as HSBC -- slashed their price targets on BP plc (ADR). However, this negative attention is being overshadowed by a judge's ruling that the company cannot be fined more than $13.7 billion for its 2010 Gulf of Mexico oil spill -- less than expected. Taking a step back, the stock is staring at a year-over-year deficit of 25.4% to rest at $35.73. Accordingly, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have displayed a greater-than-usual preference for long puts over calls in recent weeks. BP's 10-day put/call volume ratio across those exchanges is 0.59, higher than nearly three-quarters of all readings from the last 12 months.

  • Finally, Drexel Hamilton downgraded QCOM to "hold" from "buy," and slashed its price target on the stock by $25 to $75. On the charts, the shares have performed poorly, losing 4.5% of their value during the last 52 weeks to perch at $71.38. However, options traders have kept the faith in QUALCOMM, Inc. The equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.60 outstrips 76% of similar readings taken in the last year, suggesting speculators have bought to open calls over puts at a faster-than-usual clip in recent months.

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