Analyst Downgrades: Tesla Motors, Inc., Baidu, Inc., and Zulily, Inc.

Analysts downwardly revised their ratings on Tesla Motors Inc (TSLA), Baidu Inc (ADR) (BIDU), and Zulily Inc (ZU)

by Alex Eppstein

Published on Feb 12, 2015 at 9:26 AM
Updated on Apr 20, 2015 at 5:32 PM

Analysts are weighing in today on Model S maker Tesla Motors Inc (NASDAQ:TSLA), online search provider Baidu Inc (ADR) (NASDAQ:BIDU), and Internet retailer Zulily Inc (NASDAQ:ZU). Here's a quick roundup of today's bearish brokerage notes on TSLA, BIDU, and ZU.

  • TSLA is set to drop out of the gate, pressured by last night's surprise fourth-quarter loss -- and despite CEO Elon Musk's promise of a "secret weapon." Meanwhile, J.P. Morgan Securities downgraded Tesla Motors Inc to "underweight" from "neutral," on worries about stronger competition and lower energy prices. Historically, however, recent pullbacks have been contained in the $185-$195 area, which could again serve as support. If TSLA bounces again, a mass exodus of option bears could result in tailwinds. The stock's 50-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.11 -- just 1 percentage point from an annual peak. TSLA closed Wednesday at $212.80.

  • BIDU is pointed roughly 5% lower ahead of the open, following worse-than-expected fourth-quarter revenue and forward guidance, as well as a round of bearish analyst attention. Specifically, no fewer than six analysts cut their price targets on the stock, while Stifel downgraded Baidu Inc to "hold" from "buy." It's already been a rough year for the shares, which have shed 5.8% in 2015 to land at $214.67. This could spell trouble ahead, as additional analysts could downwardly revise their ratings and/or price targets on BIDU. All 12 brokerage firms following the equity have doled out "strong buy" recommendations, while its consensus 12-month price target of $274.90 stands in all-time-high territory.

  • Finally, ZU has tumbled nearly 50% year-over-year to trade at $19.89, and is down about 25% in electronic trading following a fourth-quarter earnings miss and lackluster forward guidance. Applying additional pressure is a round of bearish brokerage notes, with no fewer than six analysts dropping their price targets on ZU -- including Baird, RBC, CRT, and Canaccord Genuity, which also downgraded the stock to the equivalent of a "hold." One group that's likely cheering these developments is short sellers. More than one-quarter of Zulily Inc's float is sold short, which represents more than eight times the stock's expected daily trading levels.

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