Analyst Downgrades: Tesla Motors, Inc., Advanced Micro Devices, Inc., and Shake Shack Inc.

Analysts downwardly revised their ratings on Tesla Motors Inc (NASDAQ:TSLA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Shake Shack Inc (NYSE:SHAK)

by Josh Selway

Published on Jul 7, 2015 at 9:28 AM

Analysts are weighing in today on electric car manufacturer Tesla Motors Inc (NASDAQ:TSLA), chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD), and burger joint Shake Shack Inc (NYSE:SHAK). Here's a quick roundup of today's bearish brokerage notes on TSLA, AMD, and SHAK.

  • TSLA has been on a fabulous technical streak, adding over 54% since hitting a late-March annual low of $181.40 to trade at $279.72. The stock is poised to start 1.6% lower today, though, after Deutsche Bank downgraded the shares to "hold" from "buy." However, the firm upped its price target to $280 from $245. The majority of analysts remain in the bulls' camp, with nine of 15 saying Tesla Motors Inc is a "buy" or better. It appears this optimism is shared by short-term speculators, as well. TSLA's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.92 -- only 10 percentage points from an annual low. This indicates the stock's option traders have been more call-focused than usual, when trading options expiring in three months or less.

  • AMD has lost 42% in the past 12 months, settling at $2.47 yesterday. Things look like they're about to get much worse for the shares, as they're facing a 17% drop out of the gate -- which would put them in multi-year-low territory -- after the company lowered its current-quarter revenue expectations, due to weak demand for personal computers. Analysts have since jumped in, with no fewer than six brokerage firms lowering their price targets. Credit Suisse set the lowest marks, with an expected price of $1.90. This is all good news for the numerous traders who have shorted the stock. Specifically, 18.5% of Advanced Micro Devices, Inc.'s float is committed to short interest. What's more, it would take close to three weeks for bears to buy back their bets, at normal trading volumes.

  • Morgan Stanley lowered its outlook on SHAK to "underweight" from "equal weight," saying the stock is too expensive relative to current fundamentals. Since going public in early February, the security reached a high of $96.75 on May 22, but has since retreated to $59. On the Street, Morgan Stanley's skeptical stance isn't unusual. All six brokerage firms tracking Shake Shack Inc say it's a "hold." Plus, SHAK's average 12-month price target sits below current price levels, at $45.40. 
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