Analysts downwardly revised their ratings on GameStop Corp. (GME), Brocade Communications Systems, Inc. (BRCD), and United States Steel Corporation (X)
Analysts are weighing in on video game retailer GameStop Corp. (NYSE:GME), networking expert Brocade Communications Systems, Inc. (NASDAQ:BRCD), and steel producer United States Steel Corporation (NYSE:X). Here's a quick roundup of today's bearish brokerage notes on GME, BRCD, and X.
- Bears across Wall Street cashed in yesterday, as GME sold off in light of dismal quarterly numbers. This morning, analysts are jumping on the bandwagon. For instance, Oppenheimer downgraded the security's rating to "perform," while six other brokerage firms lowered their price targets overnight. GameStop Corp. has dropped 3.6% today to trade at $36.26, but still holds a 7% year-to-date lead. With nine of 14 analysts still calling it a "buy" or better, GME could be in store for additional downgrades, unless it quickly reverses course.
- A lower-than-expected current-quarter forecast has led to a wave of bearish notes on BRCD, which has the shares 5.8% lower at $9.50, and fresh off an annual low of $9.16. Specifically, J.P. Morgan Securities cut its opinion to "neutral" from "overweight," and was one of eight brokerage firms to lower its price target on the security, setting the bar at $9. Further losses could be in store for Brocade Communications Systems, Inc. if option bulls hit the exits. Currently, BRCD's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at a top-heavy 8.82, higher than 69% of comparable readings from the past year. In short, speculators have had an an unusually strong appetite for long calls over puts in recent weeks.
- X is 2.8% lower at $7.76 -- and earlier panned another all-time low of $7.52 -- on news the company will idle its Granite City Works operation in Illinois. United States Steel Corporation has already underperformed the broader S&P 500 Index (SPX) by almost 54 percentage points during the past three months, and a price-target cut to $19 from $32 at Argus is applying even more pressure -- though the brokerage firm maintained its "buy" recommendation. More broadly speaking, however, 69% of all analysts say X is a "hold" or worse.