Alphabet, Bank of America, NVIDIA Downgraded

Alphabet, Bank of America, and NVIDIA stock received bearish analyst attention

Apr 4, 2017 at 10:03 AM
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Analysts are weighing in on web giant Alphabet Inc (NASDAQ:GOOGL), financial stock Bank of America Corp (NYSE:BAC), and chipmaker NVIDIA Corporation (NASDAQ:NVDA). Here's a quick roundup of today's bearish brokerage notes on shares of GOOGL, BAC, and NVDA.

Alphabet Faces Amazon Threat

BMO dropped its rating on GOOGL to "market perform" from "outperform," and slashed its target price to $880 from $1,005, citing potential competition from Amazon's ad business -- and subsequently named AMZN stock a "Top Pick." FBN Securities echoed the move, lowering its price target to $1,025 from $1,050. Out of the gate, Alphabet Inc stock is down 00.6% at $851.90, but remains 7.4% higher year-to-date, and hit a record high of $874.42 on March 17. Yet, short-term options traders are extremely focused on puts over calls. GOOGL's Schaeffer's put/call open interest ratio (SOIR) stands at an annual high of 1.09.

Citigroup Waxes Pessimistic on Bank of America Stock

BAC is down 1% at $23.36, after Citigroup downgraded the bank stock to "neutral" from "buy" and lowered its price target by $1 to $25, explaining the shares are "fully valued" and there's "not much left to play for." The bearish note arrives as Bank of America Corp stock has been showing signs of weakness after a strong 2016. In fact, since topping out at a March 2 high of $25.80, BAC stock has shed almost 10% of its value. Eventually, other bullish analysts could start hitting the exits. Right now, 70% of brokerage firms rate BAC a "buy" or better, without a single "sell" opinion to be found.

Downgrade Crushes NVIDIA Stock

NVDA has tanked 4.6% at $103.20, following a downgrade to "underweight" from "sector weight" at Pacific Crest. Specifically, the brokerage firm pointed to signs of saturation in the graphics cards market, as well as lower margins from chips used in the Nintendo Switch console. Today's sharp slump represents a huge setback for NVIDIA Corporation shareholders and options traders alike. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVDA has racked up a 10-day call/put volume ratio of 1.84 -- in the high 87th percentile of its annual range. In other words, speculators have been buying to open calls over puts at an accelerated clip lately.

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