Analyst Downgrades: Whole Foods Market, Oracle, QUALCOMM

Analysts downwardly revised their ratings on Whole Foods Market, Inc. (WFM), Oracle Corporation (ORCL), and QUALCOMM, Inc. (QCOM)

by Alex Eppstein

Published on Nov 5, 2015 at 9:59 AM
Updated on Jul 2, 2020 at 3:12 PM

Analysts are weighing in on organic grocer Whole Foods Market, Inc. (NASDAQ:WFM), software giant Oracle Corporation (NYSE:ORCL), and telecom titan QUALCOMM, Inc. (NASDAQ:QCOM). Here's a quick roundup of today's bearish brokerage notes on WFM, ORCL, and QCOM.

  • WFM is getting drilled out of the gate, down 5.7% at $29.03 -- and touching a three-year low of $28.73 -- after the company posted an earnings miss. In addition, the food seller announced a $1 billion stock buyback initiative and increased its quarterly dividend payment. The brokerage bunch is responding en masse, with no fewer than 10 analysts cutting their price targets -- including Jefferies, which slashed its target to $29 from $33, and said 2016 may be a "year of pain" for Whole Foods Market, Inc., based on its disappointing profit forecast. One group set up to profit on losses is option traders, who have been buying to open puts over calls at a rapid-fire rate. Specifically, WFM's 10-day put/call volume ratio of 1.12 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 92nd percentile of its 12-month range.

  • ORCL saw its rating reduced to "market perform" from "outperform" at FBR, which cited a "lack of consistent results, an empty M&A strategy, mixed checks in the November quarter so far, and major secular challenges from the likes of Amazon Web Services" to support its bearish note. Still, the stock is up 0.2% at the open at $40.57, bringing its 2015 loss to 9.8%. Should it resume its downtrend, more analysts could start changing their tune on Oracle Corporation. At present, 15 of 25 brokerage firms still consider the shares worthy of a "buy" or better endorsement. Also, ORCL's consensus 12-month price target of $44.09 stands at a nearly 9% premium to current levels. In other words, the stock could receive additional downgrades and/or price-target reductions in the future.

  • QCOM is smarting in the wake of a poorly received earnings report, after the company's quarterly profit plunged 44% year-over-year due to struggles in China. The firm also offered up a weak current-quarter earnings forecast. In response, no fewer than eight analysts reduced their price targets on QUALCOMM, Inc., with only Exane BNP and Northland Capital breaking ranks by boosting their respective outlooks to $60 and $62.50. At last check, QCOM has plunged 10.2% to trade at $54.07 -- breaching its 40-day moving average for the first time in a month -- and is off 27% on the year. For recent put buyers, this is good news. Specifically, at the ISE, CBOE, and PHLX, QCOM has racked up a 10-day put/call volume ratio of 0.66 -- higher than two-thirds of comparable readings from the past 52 weeks.
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