Analyst Downgrades: Hewlett-Packard, SanDisk, Alibaba

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

Sep 16, 2015 at 9:28 AM
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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.

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