Analyst Downgrades: Baidu Inc, Groupon Inc, and Seagate Technology PLC

Analysts downwardly revised their ratings and price targets on Baidu Inc (ADR) (NASDAQ:BIDU), Groupon Inc (NASDAQ:GRPN), and Seagate Technology PLC (NASDAQ:STX)

by Karee Venema

Published on May 2, 2016 at 10:20 AM

Analysts weighing in on e-commerce stocks Baidu Inc (ADR) (NASDAQ:BIDU) and Groupon Inc (NASDAQ:GRPN), as well as data storage specialist Seagate Technology PLC (NASDAQ:STX). Here's a quick roundup of today's bearish brokerage notes on BIDU, GRPN, and STX.

  • Goldman Sachs lowered its price target on BIDU by $2 to $238, sending the shares tumbling 7.9% to $179.01 -- and south of their 50-day moving average for the first time since Feb. 25. Longer term, the stock has added 28% since hitting a year-to-date low of $139.61 on Feb. 9 -- thanks in part to last week's stellar earnings report -- and options traders have been betting on more upside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BIDU's 50-day call/put volume ratio of 2.04 stands at an annual high. Separately, Chinese regulators said they'll be investigating Baidu Inc, after the death of a young cancer patient.
  • GRPN has plunged 4.3% to $3.47, after RBC lowered its rating to "underperform" from "sector perform," and slashed its price target to $3 from $4. Meanwhile, Jefferies and Deutsche Bank raised their price targets on the stock, to $3.50 and $5, respectively. Today's decline only exacerbates last Friday's earnings-induced slide, with shares of GRPN now off 34% from their March 4 year-to-date high of $5.28. In the options pits, put buyers have been busy in recent weeks. In fact, Groupon Inc's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.33 rests higher than 78% of all comparable readings taken in the past year.
  • STX has been caught in analysts' crosshairs since the company reported worse-than-expected fiscal third-quarter earnings last Friday. In fact, while J.P. Morgan Securities slashed its rating to "underweight" and its price target to $15, at least 12 other brokerage firms cut their target prices over the weekend. Against this backdrop, shares of STX are off 5.3% at $20.62, after earlier hitting a four-year low of $20.41. This negative price action is just more of the same for a stock that's shed 40% since the start of April. Short sellers have likely been cheering, too. Short interest surged 15.6% in the two most recent reporting periods, and now accounts for a healthy 13% of Seagate Technology PLC's available float.
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