Analyst Downgrades: American Express, Ambarella, Groupon

Analysts downwardly revised their ratings on American Express Company (AXP), Ambarella Inc (AMBA), and Groupon Inc (GRPN)

Oct 26, 2015 at 9:28 AM
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Analysts are weighing in on credit card concern American Express Company (NYSE:AXP), video tech issue Ambarella Inc (NASDAQ:AMBA), and mass discount provider Groupon Inc (NASDAQ:GRPN). Here's a quick roundup of today's bearish brokerage notes on AXP, AMBA, and GRPN.

  • AXP is pointed 1.5% lower ahead of the bell, after UBS downgraded the blue chip to "sell" from "neutral" and sliced its price target to $67 from $81 -- in two-year-low territory. Last week, American Express Company already hit a two-year low of $71.39, after the firm unveiled disappointing earnings, before closing Friday at $74.59. More analysts could abandon the bulls' camp, as AXP boasts eight "buy" or better endorsements, compared to eight lukewarm "holds" and just three "sell" or worse ratings. Meanwhile, option buyers are already upping the bearish ante. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AXP's 10-day put/call volume ratio of 1.54 stands higher than 96% of all other readings from the past year.
  • AMBA is shrugging off a price-target cut to $75 from $95 at Morgan Stanley, with the shares sitting 0.2% higher in pre-market action. The equity has erased more than half its value since topping out at $129.19 in mid-July, ending last week at $53.24. Ambarella Inc has largely gone the way of GoPro Inc (NASDAQ:GPRO) -- to which it provides camera technology -- and option players have taken notice. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.32 stands higher than 89% of all other readings from the past year, suggesting near-term traders are more put-biased than usual. However, seven of 12 analysts maintain "strong buy" opinions, leaving the door wide open for potential downgrades.
  • GRPN saw its price target cut to $4.50 from $5.25 at Evercore ISI, yet the shares are pointed modestly higher ahead of the bell. The security has dropped 56.2% in 2015, settling at $3.62 on Friday, and analysts are migrating to the bears' camp. Still, seven of 18 brokerage firms rate GRPN a "strong buy," and the average 12-month price target of $5.60 represents a premium of 54.7% to GRPN's current price. Plus, Groupon Inc sports a 10-day call/put volume ratio of 34.91 at the ISE, CBOE, and PHLX -- in the 97th percentile of its annual range, implying that option buyers have shown a healthier-than-usual appetite for long calls over puts of late. A shift in sentiment could drive GRPN even lower.
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