Analyst Downgrades: Yelp Inc, Workday Inc, and Cisco Systems, Inc.

Analysts downwardly revised their ratings and price targets on Yelp Inc (YELP), Workday Inc (WDAY), and Cisco Systems, Inc. (CSCO)

Feb 8, 2016 at 10:14 AM
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Analysts are weighing in on consumer review site Yelp Inc (NYSE:YELP), cloud concern Workday Inc (NYSE:WDAY), and networking solutions specialist Cisco Systems, Inc. (NASDAQ:CSCO). Here's a quick roundup of today's bearish brokerage notes on YELP, WDAY, and CSCO.

  • YELP is trading 11.3% lower at $16.05 -- and earlier hit a new three-year low of $15.87 -- after Susquehanna cut its price target on the stock to $20 from $22 ahead of tonight's fourth-quarter earnings report. Yelp Inc has given up 42% in 2016. Unsurprisingly, analysts have been lukewarm at best, giving the security 20 "hold" or worse ratings, compared to eight "buys" or better. But option traders have been eyeing a bounce, buying to open 5.20 YELP calls for each put during the last 10 trading days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio that arrives in the 86th percentile of its annual range. If option bulls change their tunes after tonight's earnings, the shares could be headed for another multi-year low.

  • Goldman Sachs slashed its price target on WDAY to $74 from $86, sending the shares down 7% to $50.46, and fresh off a nearly three-year low of $50.30. RBC also chimed in on the shares, lowering its target price to $72 from $89. Workday Inc has fallen sharply since December, and has underperformed the S&P 500 Index (SPX) by more than 26 percentage points over the past three months. Still, analysts are equally split between "hold" and "buy" or better ratings. Option traders have been generally bearish, with WDAY's 50-day put/call volume ratio on the ISE, CBOE, and PHLX outranking nearly three-fourths of the past year's readings, at 1.13.

  • Ahead of the CSCO's quarterly earnings release, due this Wednesday after the close, Goldman Sachs removed the stock from its "America's Conviction Buy" list, saying it expects macro headwinds to create potential challenges this year. Goldman Sachs also lowered its price target on Cisco Systems, Inc. by $3 to $32, while Stifel and Jefferies cut their price targets. Macquarie, meanwhile, bucked the bearish trend, upgrading CSCO to "neutral." The stock is trading 1.3% lower at $22.60, sitting on a year-to-date loss of 16.8%. As such, option traders are at a bearish extreme, with the equity's 50-day put/call volume ratio at the ISE, CBOE, and PHLX in the top percentile of its annual range, at 0.64. But 68% of analysts still call CSCO at least a "buy," leaving the door open for future downgrades.
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