Analyst Downgrades: Apple Inc., Intrexon Corp, and Gap Inc

Analysts downwardly revised their ratings and price targets on Apple Inc. (NASDAQ:AAPL), Intrexon Corp (NYSE:XON), and Gap Inc (NYSE:GPS)

by Karee Venema

Published on Aug 11, 2015 at 9:57 AM
Updated on Aug 11, 2015 at 1:04 PM

Analysts are weighing in on iPhone parent Apple Inc. (NASDAQ:AAPL), biotech Intrexon Corp (NYSE:XON), and retailer Gap Inc (NYSE:GPS). Here's a quick roundup of today's bearish brokerage notes on AAPL, XON, and GPS.

  • It's been a rough ride for AAPL, with the shares off 12.4% from their April 28 all-time high at $134.54 to trade at $117.86. The stock is adding to this deficit today, after Jefferies lowered its price target on the stock to $130 from $135, citing -- unlike UBS -- concern over the company's ability to grow, as well as uncertainty surrounding iPhone demand in China. This negative analyst attention is relatively rare for Apple Inc., with nearly 61% of brokerages maintaining a "buy" or better rating, and the average 12-month price target of $146.88 sitting in record-high waters. It's an entirely different set-up in the options pits, however, where speculators have been initiating long puts at a rapid-fire rate in recent weeks.

  • XON is down 5.8% at the open to linger near $54.34, after the company's smaller-than-expected second-quarter revenue was met with a downgrade to "underperform" from "neutral" at Mizuho, and a ratings cut to "neutral" at J.P. Morgan Securities (which simultaneously raised its price target to $55). Overall, it's been a strong year for the shares of XON, which have more than doubled in value -- and are fresh off last Thursday's record high of $69.45. Sentiment is skewed toward the skeptical side, though, and at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), XON's 10-day put/call volume ratio of 0.94 sits higher than 80% of all similar readings taken in the past year. Elsewhere, 26.1% of Intrexon Corp's float is sold short, representing 7.9 times the stock's average daily pace of trading.

  • GPS was hit with a bevy of bearish brokerage notes today, after the firm unveiled a smaller-than-forecast second-quarter earnings outlook. FBR and Cantor Fitzgerald, for example, each cut their price targets to $36, while Nomura lowered its target price to $35. Against this backdrop, the shares are down 0.4% at the open to $35.11, widening their year-to-date deficit to 16.6%. What's more, the stock is edging closer to its two-year low of $34.32, tagged last Thursday. Option traders have paid no mind to this downtrend, though, and at the ISE, CBOE, and PHLX, GPS' 50-day call/put volume ratio of 2.15 rests in the 93rd percentile of its annual range. In other words, calls have been bought to open over puts with more rapidity just 7% of the time within the past year. Gap Inc will unveil its full second-quarter earnings report after the market closes on Thursday, Aug. 20.
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