Analyst Downgrades: Hewlett-Packard Company, SanDisk Corporation, and Alibaba Group Holding Ltd

Analysts downwardly revised their ratings on Hewlett-Packard Company (HPQ), SanDisk Corporation (SNDK), and Alibaba Group Holding Ltd (BABA)

by Alex Eppstein

Published on Sep 16, 2015 at 9:28 AM

Analysts are weighing in today on computer hardware firm Hewlett-Packard Company (NYSE:HPQ), flash storage specialist SanDisk Corporation (NASDAQ:SNDK), and e-tailer Alibaba Group Holding Ltd (NYSE:BABA). Here's a quick roundup of today's bearish brokerage notes on HPQ, SNDK, and BABA.

  • HPQ announced another round of job cuts, totaling roughly 33,000 positions, as it prepares to split into two companies. The brokerage crowd is panning the news, with Maxim, Monness Crespi Hardt, and J.P. Morgan Securities cutting their respective price targets. Nonetheless, Hewlett-Packard Company is pointed 2.8% higher ahead of the bell. Longer term, it's been a rough year for the stock, which has lost nearly one-third of its value in 2015, at $27.11. As such, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been betting bearishly. During the past 50 days, HPQ has racked up a put/call volume ratio of 1.03 -- just 1 percentage point from a 12-month peak.

  • SNDK has been a dud on the charts, shedding 43% year-to-date at $55.72. This hasn't been lost on Goldman Sachs, which downgraded its opinion on the stock to "neutral" from "buy," removed SanDisk Corporation from its "Americas Buy" list, and slashed its price target to $55 from $73. As such, the equity is down another 2.2% pre-market. For some reason, option traders have yet to catch the bearish drift, per the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.05 -- in the 75th annual percentile. A capitulation among these bullish holdouts could result in headwinds for SNDK.

  • BABA, which just inked a content deal with DHX Media, saw its price-target dropped to $85 from $105 at MKM Partners. The downward revision is warranted, given that the stock has plummeted 46% since its mid-November record high of $120, to last night's close at $64.85. Amid this long-term swoon, bearish betting has intensified at the ISE, CBOE, and PHLX. Specifically, Alibaba Group Holding Ltd's 10-day put/call volume ratio of 1.41 registers above 98% of comparable readings from the past year. Elsewhere, bullish analysts could start abandoning ship in the not-too-distant future. Twenty-one of 24 brokerages rate BABA a "buy" or better, while its consensus 12-month price target of $91.92 stands at a 41.7% premium to current trading levels.

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!


A Schaeffer's exclusive

TOP STOCK PICKS 2020

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Stocks Eye Notable Weekly Gains on 3-Day Surge
Stocks are eyeing big weekly gains
WW Stock Brushes Off Bull Note
Morgan Stanley upgraded the Weight Watchers parent to "overweight" from "equal weight"
IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.