Analyst Downgrades: Tesla, IBM, United Natural Foods

Analysts downwardly revised their ratings on Tesla Motors Inc (NASDAQ:TSLA), International Business Machines Corp. (NYSE:IBM), and United Natural Foods, Inc. (NASDAQ:UNFI)

Karee Venema
Jul 21, 2015 at 10:18 AM
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Analysts are weighing in on electric car concern Tesla Motors Inc (NASDAQ:TSLA), tech titan International Business Machines Corp. (NYSE:IBM), and specialty food producer United Natural Foods, Inc. (NASDAQ:UNFI). Here's a quick roundup of today's bearish brokerage notes on TSLA, IBM, and UNFI.

  • UBS took a no-holds-barred approach to TSLA, cutting its outlook to "sell" from "neutral" and its price target to $210 from $220 -- territory not charted by the stock since late April. Specifically, the brokerage firm said the company's early energy storage orders are "misleading," and that the division will likely fall short of expectations. Technically speaking, TSLA has been a standout, up 22% year-to-date. In fact, the shares hit their highest point since their Sept. 4 record high of $291.42 yesterday, at $286.65, but were more recently seen lingering near $270.97. While option traders have been initiating long calls over puts at an accelerated clip, short sellers have been rolling the dice on a retreat. Short interest accounts for more than 24% of Tesla Motors Inc's available float, or 7.1 times the average daily trading volume.

  • IBM has plunged 4.9% in early trading to linger near $164.71, after the company reported a 13th straight decline in quarterly revenue. Meanwhile, although the stock received a round of post-earnings price-target hikes -- including one from RBC to $170 from $160 -- J.P. Morgan Securities lowered its target price to $173 from $177. Longer term, International Business Machines Corp. is down 14% year-over-year, with recent rally attempts curtailed by IBM's 320-day moving average. Option traders, it seems, have been betting on Big Blue to snap out of its slump. The equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.64 ranks higher than 94% of all similar readings taken in the past year.

  • UNFI plunged to a two-year low of $52.28 out of the gate -- and was last seen down 12.7% at $54.63, and on the short-sale restricted list. Prompting the day's sell-off is news the firm has terminated its contract with Albertsons Companies, Inc., as well as a subsequent round of bearish brokerage notes. Oppenheimer, for example, lowered its rating to "perform" from "outperform" and its price target to $60 from $70, while Canaccord Genuity cut its target price to $65 from $71. Today's negative price action is just more of the same for a stock that was down more than 19% this year heading into today's trading -- which has more than likely been pleasing short sellers. Short interest on United Natural Foods, Inc. surged 42.5% in the last two reporting periods, and now accounts for 12% of the equity's available float.

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