Analyst Downgrades: Alibaba, Marvell, and Silver Wheaton

Analysts downwardly revised their ratings on Alibaba Group Holding Ltd (NYSE:BABA), Marvell Technology Group Ltd. (NASDAQ:MRVL), and Silver Wheaton Corp. (USA) (NYSE:SLW)

Sep 14, 2015 at 10:05 AM
facebook twitter linkedin

Analysts weighed in on e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA), semiconductor specialist Marvell Technology Group Ltd. (NASDAQ:MRVL), and mining firm Silver Wheaton Corp. (USA) (NYSE:SLW). Here's a quick roundup of today's bearish brokerage notes on BABA, MRVL, and SLW.

  • Barron's was busy over the weekend, and for BABA, this resulted in the projection that the stock could fall an additional 50% (subscription required) amid increased competition, lackluster growth numbers, and China's economic troubles. (The equity has already shed 39.8% in 2015 to trade at $62.56, and hit a record low of $58 as recently as Aug. 28.) Alibaba Group Holding Ltd was quick to respond to the bearish write-up, saying it "contains factual inaccuracies and selective use of information."

    However, Barron's wasn't the only one to chime in on BABA, with the equity receiving price-target cuts from Deutsche Bank (to $85), Evercore ISI (to $86), and Raymond James (to $85). Should the security continue to struggle, an additional round of negative analyst notes could be on the horizon. Currently, 21 out of 24 brokerages maintain a "buy" or better rating on BABA, with not a single "sell" to be found. Plus, the average 12-month price target of $93.24 rests in territory not charted since late May.

  • It's been a dismal run for MRVL, which is down 42% year-to-date at $8.45. This negative price action has only been exacerbated by last Friday's announcement of a freshly launched internal investigation, and this morning's round of bearish brokerage notes. Morgan Stanley, B. Riley, and Brean Capital, for example, downgraded the stock to the equivalent of a "neutral" rating, with the former two also lowering their price targets. Sentiment in the options pits is also skeptical. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Marvell Technology Group Ltd.'s 10-day put/call volume ratio of 1.30 rests just 2 percentage points from a 52-week peak.

  • Over the weekend, BMO lowered its rating on SLW to "market perform" and its price target to $13. As such, the shares have slid 5.1% out of the gate to a nearly six-year low of $11.03 -- widening their year-to-date deficit to 45.8%. The stock's technical troubles have been in full view recently. In the options pits, meanwhile, Silver Wheaton Corp.'s Schaeffer's put/call open interest ratio (SOIR) of 0.43 sits lower than all other comparable readings taken in the past year. Simply stated, short-term traders are more call-heavy now than they've been at any other point over the past year.

Get the skinny on all the biggest stories of the morning… Sign up now to get Schaeffer's Midday Market Check delivered straight to your inbox!

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners