Analyst Downgrades: NetApp, Rexnord, and JA Solar

Analysts downwardly revised their ratings on NetApp Inc. (NASDAQ:NTAP), Rexnord Corp (NYSE:RXN), and JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO)

by Karee Venema

Published on May 21, 2015 at 9:49 AM
Updated on Jul 13, 2020 at 4:23 PM

Analysts are weighing in on data storage specialist NetApp Inc. (NASDAQ:NTAP), industrial issue Rexnord Corp (NYSE:RXN), and alternative energy name JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO). Here's a quick roundup of today's bearish brokerage notes on NTAP, RXN, and JASO.

  • NTAP is down 11.4% -- and hit a two-year low of $31.01 in early trading -- after the firm reported a fiscal fourth-quarter earnings miss, offered up a dreary current-quarter outlook, and announced a round of layoffs. Adding to the bearish backdrop is a round of downbeat analyst notes. J.P. Morgan Securities, for example, downgraded the stock to "underweight" from "neutral" and lowered its price target by $6 to $29, explaining the firm is not adopting its cloud protection system at a quick enough speed. Elsewhere, Cantor reduced its rating to "hold" from "buy" and slashed its price target by $8 to $35, saying NetApp Inc. appears "vulnerable to customer defections and market share losses in [a] very competitive storage market." Year-to-date, the shares have shed roughly 24% to linger near $31.30. In the options pits, put buyers were loading up their positions ahead of earnings, per NTAP's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 2.02, which ranks in the 88th annual percentile.
  • RXN tagged an annual low of $24.09 out of the gate -- and was last seen 8.3% lower at $24.87 -- after its disappointing turn in the earnings confessional. What's more, Wedbush downgraded the security to "neutral" from "outperform" and cut its price target to $27 from $32, while Baird also lowered its price target to $27 (from $29). For most of the year, RXN has been bouncing between $24.50 and $27.50 -- the latter of which coincides with the stock's 320-day moving average -- and it appears short sellers have been anticipating more technical turbulence. Short interest jumped 12.3% in the most recent reporting period, and now accounts for 3.3 million shares. It would take more than a week to cover these shorted shares, at Rexnord Corp's average daily pace of trading.
  • Roth Capital reduced JASO to "neutral" from "buy," bucking the bullish bias seen among the brokerage bunch. In fact, ahead of today's downgrade, each of the analysts covering the shares maintained a "buy" or better rating, and the average 12-month price target of $12.40 stands at a 38% premium to the stock's current perch at $8.96 -- and in territory not charted since March 2014. Technically speaking, the stock has fared better than sector peer Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), up 8% year-to-date. Plus, despite taking a sharp dive yesterday following an unexpectedly steep sell-off in Chinese solar stock Hanergy Thin Film Power Group Ltd, JA Solar Holdings Co., Ltd. found a firm foothold atop its 160-day moving average.

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