Analyst Downgrades: Hewlett-Packard Company, Marvell Technology Group Ltd., and Otonomy, Inc.

Analysts downwardly revised their ratings on Hewlett-Packard Company (NYSE:HPQ), Marvell Technology Group Ltd. (NASDAQ:MRVL), and Otonomy Inc (NASDAQ:OTIC)

by Karee Venema

Published on May 22, 2015 at 9:39 AM
Updated on May 22, 2015 at 9:42 AM

Analysts are weighing in on computer issue Hewlett-Packard Company (NYSE:HPQ), semiconductor concern Marvell Technology Group Ltd. (NASDAQ:MRVL), and biopharmaceutical firm Otonomy Inc (NASDAQ:OTIC). Here's a quick roundup of today's bearish brokerage notes on HPQ, MRVL, and OTIC.

  • HPQ received price-target cuts from Cantor (to $33), RBC (to $37), and BMO (to $38), after the firm posted mixed results for its fiscal second quarter, and said it will endure around $400 million in costs when it splits into two separate companies in November. These aren't the first headlines HPQ has made this week, with yesterday's M&A news providing Hewlett-Packard Company shares with a quick shot in the arm. Longer term, though, the stock has been a laggard, shedding more than 14% of its value year-to-date. Another round of downwardly revised price targets could be in the pipeline, should HPQ continue to struggle. The security's average 12-month price target of $40.40 represents expected upside of 17.4% to HPQ's present price of $34.42.
  • A number of brokerage firms chimed in on MRVL, following the company's first-quarter revenue miss. Additionally, Marvell Technology Group Ltd. offered up a lower-than-expected current-quarter forecast and announced the retirement of Chief Financial Officer Mike Rashkin. Included in the bunch was Credit Suisse, which cut its price target to $13 from $16, and Jefferies, which reduced its target price to $14 from $15. Raymond James, meanwhile, boosted its price target to $16 from $15 -- a 14.7% premium to the stock's current perch at $13.95. Against this backdrop, MRVL is down 2.9% at the open, which could prompt some option bulls to hit the bricks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MRVL's 50-day call/put volume ratio of 11.52 sits in the 94th annual percentile. In other words, calls have been bought to open over puts with more rapidity just 6% of the time within the past year.
  • OTIC plunged 18.4% out of the gate to $25.35, after the company's experimental ear drug, OTO-104, failed to meet the main goal of its mid-stage trial. Adding to the bearish bias is a downgrade to "neutral" from "overweight" and price-target cut to $30 from $42 at J.P. Morgan Securities. Bernstein also weighed in on Otonomy Inc, reducing its target price to $30 from $34. Heading into today's session, the stock had already lost over a quarter of its value since topping out at a record high of $41.99 in mid-March, and short sellers have likely been cheering. At present, more than 10% of the equity's float is sold short.


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