Analyst Downgrades: Transocean Ltd., Quest Diagnostics Incorporated, and Western Digital Corporation

Analysts downwardly revised their ratings on Transocean LTD (NYSE:RIG), Quest Diagnostics Inc (NYSE:DGX), and Western Digital Corp (NASDAQ:WDC)

by Karee Venema

Published on Jun 23, 2015 at 9:44 AM
Updated on Jun 23, 2015 at 9:45 AM

Analysts are weighing in today on oil-and-gas issue Transocean LTD (NYSE:RIG), diagnostic testing specialist Quest Diagnostics Inc (NYSE:DGX), and data storage solutions concern Western Digital Corp (NASDAQ:WDC). Here's a quick roundup of today's bearish brokerage notes on RIG, DGX, and WDC.

  • Global Hunter Securities cut its price target on RIG to $16 from $18 -- representing a discount to last night's close at $16.94. However, reports the company inked $109 million in new drilling contracts -- an annual high -- are overshadowing this downbeat analyst note, with shares of RIG up 1.4% at $17.17. Technically speaking, its been a rough road for Transocean LTD, which hit a 52-week peak of $46.12 one year ago today, but has since shed 63% of its value. Against this backdrop, sentiment among the brokerage bunch is already skewed toward the skeptical side. All 19 analysts, for example, maintain a "hold" or worse rating.

  • DGX saw its rating reduced to "neutral" from "buy" at Goldman Sachs, sending the shares down 1% in early trading. Since spiking to an all-time high of $89 in late May amid M&A rumors, the stock has cooled its jets, down 19.6% at $71.55. Option traders, meanwhile, have been rolling the dice on a rebound by buying to open calls over puts at a faster-than-usual clip. Specifically, Quest Diagnostics Inc's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 6.81 ranks in the 73rd percentile of its annual range.

  • J.P. Morgan Securities lowered its outlook for WDC to "neutral" from "overweight," and cut its price target to $92 from $105 -- roughly in line with Monday's settlement at $91.60. The stock dropped 2.5% out of the gate to $89.36 on the negative analyst attention, bringing its year-to-date deficit to 19.3%. Should Western Digital Corp continue to struggle, another round of downgrades and/or price-target cuts could come down the pike from the generally upbeat brokerage bunch -- which may create additional headwinds for the shares. Of the 19 analysts covering the WDC, 15 maintain a "buy" or "strong buy" rating, while the average 12-month price target of $115.67 sits in territory yet to be charted.

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