Analyst Downgrades: Boeing Co, Netflix, Inc., and Activision Blizzard, Inc.

Analysts downwardly revised their ratings and price targets on Boeing Co (BA), Netflix, Inc. (NFLX), and Activision Blizzard, Inc. (ATVI)

Feb 12, 2016 at 9:26 AM
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Analysts are weighing in on aerospace interest Boeing Co (NYSE:BA), streaming content provider Netflix, Inc. (NASDAQ:NFLX), and video game maker Activision Blizzard, Inc. (NASDAQ:ATVI). Here's a quick roundup of today's bearish brokerage notes on BA, NFLX, and ATVI.

  • After news of an SEC accounting probe broke on Thursday, BA gapped 6.8% lower, hitting a two-year low of $102.10 before settling at $108.44. This morning, the equity is pointed 1.4% lower, as J.P. Morgan Securities downgraded the stock to "neutral" from "overweight," while cutting its price target to $120 from $142. BofA-Merrill Lynch and RBC also lowered their price targets on Boeing Co, to $115 and $128, respectively. The security has lost 25% since the beginning of the year, slipping after reporting disappointing fourth-quarter earnings at the end of January. As such, option traders have done an about-face, turning distinctively bearish; at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BA's 10-day put/call volume ratio of 2.28 is higher than 98% of all readings taken in the past year.
  • Citing strong competition and concerns about subscription growth, FBR downgraded NFLX to "market perform" from "outperform," with a price target set at $100. However, the shares seem to be shaking it off, pointed 0.8% higher in pre-market trading after closing at $86.35 on Thursday. While Netflix, Inc. has pulled back significantly since its December all-time high, the stock is still ahead almost 33% year-over-year. Bearish option traders have begun backing off in recent weeks, bringing the equity's 50-day call/put volume ratio on the ISE, CBOE, and PHLX to 1.21 -- higher than nearly three-fourths of the past year's readings. And a fair amount of buying power remains on the sidelines -- about 13% of NFLX's available float is still wrapped up in short interest.
  • ATVI reported fourth-quarter earnings last night that missed analyst estimates, prompting no fewer than eight brokerages to lower their price targets on the stock -- with the deepest cut coming from Barclays, to $32 from $40. Activision Blizzard, Inc. is set to drop 5.5% at the bell, after closing at $30.52 on Thursday. Bearish option traders will likely be cheering today's slip, but short sellers may be wishing they had held on longer -- short interest on ATVI has dropped sharply in recent weeks, and now account for less than 4% of the stock's total float.
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