Analyst Downgrades: Alibaba Group Holding Ltd, Seagate Technology PLC, and United States Steel Corporation

Analysts downwardly revised their ratings and price targets on Alibaba Group Holding Ltd (BABA), Seagate Technology PLC (STX), and United States Steel Corporation (X)

Feb 1, 2016 at 9:27 AM
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Analysts are weighing in on China-based e-tailer Alibaba Group Holding Ltd (NYSE:BABA), data storage dynamo Seagate Technology PLC (NASDAQ:STX), and commodity concern United States Steel Corporation (NYSE:X). Here's a quick roundup of today's bearish brokerage notes on BABA, STX, and X.

  • Another day, another round of bearish brokerage attention for BABA. This time around, MKM Partners cut its price target on the stock to $95 from $105. The negative note comes as little surprise, considering Alibaba Group Holding Ltd has already lost 17.5% in the new year to trade at $67.03, and spent the last two months of 2015 failing to conquer the $84-$85 area. At the same time, there's plenty more room for future downgrades. Despite the shares' underperformance, 16 of 19 analysts still rate them a "buy" or better, with not a single "sell" rating to be found. If BABA -- off 0.7% pre-market -- continues to struggle, a fresh crop of downgrades could exacerbate selling pressure.

  • STX is fractionally lower ahead of the bell, after being on the receiving end of a mixed round of brokerage notes. While Benchmark upped its opinion to "hold," no fewer than five analysts cut their price targets on the stock -- with UBS hacking the deepest, to $26 from $31. Technically speaking, Seagate Technology PLC has been stair-stepping its way lower for the past year since hitting an annual high of $63.39 in March -- and notched a three-year low of $26.25 last Thursday -- but popped 8.6% on earnings last Friday to close at $29.05. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have been upping the bearish ante in recent weeks. Specifically, STX's 10-day put/call volume ratio of 1.52 registers above four-fifths of readings taken in the last year.

  • X saw its rating lowered to "neutral" from "outperform" at Macquarie, and its price-target slashed to $4.50 from $5 at Deutsche Bank. As such, the shares are bracing for a 3.6% drop out of the gate -- business as usual for a stock that's lost over 67% since its August peak of $21.49 to rest at $7, and hit a record low of $6.15 last Thursday. Short sellers and option traders alike have been betting against United States Steel Corporation. During the latest reporting period, short interest on the stock rose 9% and now accounts for 43.2% of its float. Likewise, X's 10-day ISE/CBOE/PHLX put/call volume ratio of 3.73 ranks just 6 percentage points from a 52-week high.
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