Analyst Downgrades: Alibaba, ACADIA, Hewlett-Packard

Analysts downwardly revised their ratings on Alibaba Group Holding Ltd (BABA), ACADIA Pharmaceuticals Inc. (ACAD), and Hewlett-Packard Company (HPQ)

Mar 12, 2015 at 9:57 AM
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Analysts are weighing in today on e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA), biopharmaceutical firm ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), and tech issue Hewlett-Packard Company (NYSE:HPQ). Here's a quick roundup of today's bearish brokerage notes on BABA, ACAD, and HPQ.

  • A lot is happening with BABA this morning. The company is reportedly searching to hire staff in Seattle with cloud computing expertise, in hopes of increasing its U.S. operations. Also, Alibaba Group Holding Ltd has invested $200 million in picture-sharing application Snapchat -- following yesterday's reports the firm may be interested in a new venture in India. If all that wasn't enough, China's SAIC Motor Corp Ltd said it will be investing in Internet-connected cars with BABA. Amid all this, Deutsche Bank cut its price target on the shares to $98, but kept its "buy" rating. The recommendation mirrors the general sentiment on the Street, as 21 out of 22 covering brokerage firms rate the security a "buy" or better. Still, BABA has been weak in 2015, dropping over 21% year-to-date to trade at $82.76.

  • ACAD started the week brilliantly, hitting an all-time high on Tuesday, but is now reversing course -- dropping 21.5% to $35.13 out of the gate, after announcing it would delay seeking regulatory approval for its leading Parkinson's drug until the second half of 2015. It also announced that CEO Uli Hacksell was resigning, effective immediately. In response to these developments, ACADIA Pharmaceuticals Inc. saw its price target reduced by no fewer than six brokerage firms, including JMP Securities, which slashed its target price by $7 to $43. Today's bear gap is likely pleasing one group of traders, as over one-fifth of ACAD's float is sold short.

  • Barclays downgraded HPQ to "equal weight" from "overweight," while slashing the stock's price target to $35 from $42. The equity has already had its issues of late, underperforming the S&P 500 Index (SPX) by nearly 19 percentage points in the past two months. In the last two weeks, however, Hewlett-Packard Company calls have been hot at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), perhaps due to M&A news. The security's 10-day call/put volume ratio across these exchanges comes in at 4.06 -- only 7 percentage points from an annual high. At last check, the stock was off 2.3% at $32.61.
 

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