Analyst Update: General Electric, IBM, Applied Materials

Analysts adjusted their ratings on General Electric Company (GE), International Business Machines Corp. (IBM), and Applied Materials, Inc. (AMAT)

Oct 5, 2015 at 12:33 PM
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Analysts are weighing in today on Dow components General Electric Company (NYSE:GE) and International Business Machines Corp. (NYSE:IBM), along with chipmaker Applied Materials, Inc. (NASDAQ:AMAT). Here's a quick roundup of today's brokerage notes on GE, IBM, and AMAT.

  • This morning, Barclay's lowered GE's price target to $30 from $32. While this type of news normally pushes a stock lower, shares of General Electric Company have advanced 4% to $26.52. The Dow component has rallied thanks to news that Nelson Peltz's Trian Fund Management LP disclosed a $2.5 billion stake in GE. Elsewhere, the conglomerate said it will sell its aircraft financing business for $2.5 billion to Global Jet Capital. Technically, today's pop has the stock trading above its 200-day moving average, which rejected an advance in mid-September. Option players have been banking on downside for GE, as its 10-day put/call volume ratio of 0.88 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is higher than 91% of the readings taken during the past 52 weeks. Expanding to the 50-day put/call volume ratio, GE's reading checks in at 0.69, which ranks in the 82nd annual percentile.

  • IBM is tracking the broader market higher, despite a price-target cut to $155 from $170 at RBC. International Business Machines Corp. also announced that it is going to acquire data storage firm Cleversafe Inc. to help expand its cloud business. Technically, IBM has been sledding downhill since hitting a recent high of $173.78 in late July. Specifically, the shares have lost 15% to their current perch of $147.92. On the sentiment front, option players have stocked up on IBM puts, as its 50-day put/call volume ratio of 0.81 on the ISE, CBOE, and PHLX ranks in the 82nd annual percentile. Analysts are also skeptical, as eight of the 12 brokerages tracking IBM rate it a "hold" or worse.
  • AMAT is nearly 1% higher at $15.05 this afternoon, after RBC downgraded its rating to "underperform" from "sector perform," and lowered its price target to $12 from $16. In December 2014, shares of Applied Materials, Inc. hit a decade-plus high of $25.71, but have lost 41% since -- succumbing to pressure from their 10-week moving average. Despite this underperformance, analysts maintain a rather bullish stance toward AMAT. Eleven of the 17 brokerages following the firm rate it a "strong buy," against six "holds" and not one "sell." Downgrades from this bullish bunch could put the stock under some serious strain.
For other stocks in analysts' crosshairs, read Analyst Upgrades: bluebird bio Inc, Juniper Networks, Inc., and Toll Brothers Inc and Analyst Downgrades: Deere & Company, Potash Corporation of Saskatchewan, and FireEye Inc
 

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