Analyst Downgrades: Cavium Inc, BlackBerry Ltd, and Jabil Circuit, Inc.

Analysts downwardly revised their ratings and price targets onCavium Inc (CAVM), BlackBerry Ltd (BBRY), and Jabil Circuit, Inc. (JBL)

by Celeste Taylor

Published on Jun 16, 2016 at 10:54 AM

Analysts are weighing in on semiconductor stock Cavium Inc (NASDAQ:CAVM), mobile communications company BlackBerry Ltd (NASDAQ:BBRY), and Apple Inc. (NASDAQ:AAPL) supplier Jabil Circuit, Inc. (NYSE:JBL). Here's a quick roundup of today's bearish brokerage notes on CAVM, BBRY, and JBL.

  • CAVM is down 17% at $39.83 -- and just off an annual low of $39.58 -- after last night announcing that it's purchasing networking tech company QLogic Corporation (NASDAQ:QLGC) to the tune of $1.36 billion. This news was met with an onslaught of analyst disapproval, with CAVM receiving no fewer than four downgrades and six price-target cuts in the hours since. Among them, Jefferies downgraded CAVM to "hold" from "buy" and sliced its price target to $45 from $61. This latest drop puts Cavium Inc down over 38% since the beginning of 2016, and short sellers have been hot on the stock, with short interest up 13.1% over the previous two reporting periods, and 13.3% of the shares now sold short -- an amount that would take nine days of trading, at CAVM's average daily volume, to cover.
  • BBRY is down 2.3% at $6.67, following a price-target cut to $7 from $7.50 by Imperial Capital. BlackBerry Ltd is down 27.3% year-to-date, with its most recent rally attempt halted by its 160-day moving average. Options bulls have been hot on the stock, though, with BBRY's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 8.24 currently at a 12-month high. Short interest has dwindled lately, but still accounts for 11.5% of BBRY's float, or 17.3 days' worth of trading, at BBRY's average daily volume. The company will host its annual shareholder meeting on Wednesday, June 22.
  • JBL is up 0.5% at $18.54, after announcing per-share earnings that beat analysts' expectations, though the company also unveiled weak guidance. JBL has received no fewer than five price-target cuts by brokerage firms, including Deutsche Bank, RBC, Goldman Sachs, UBS, and Needham. Jabil Circuit, Inc. is down 20% year-to-date, but the AAPL supplier is set for its fourth straight week above its 10-week trendline. Near-term traders have been put-biased toward the stock as of late, with JBL's Schaeffer's put/call open interest ratio (SOIR) of 1.16 sitting in the 79th percentile of its 12-month range. 
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