Stock Downgrades: Apple Unable to Keep the Doctor Away
Wall Street ratings agencies set the tone for today's stock market.
It was déjà vu all over again on Wall Street, with Dell Inc. (DELL) surging 7.16% and Apple Inc. (AAPL) imploding 3.15%. Thus on both Monday and Tuesday the stocks were respectively the best, and worst, on the entire S&P 500 Index (^GSPC). It’s unlikely the mortal enemies will ever send each other one of Taylor Swift’s American Greetings (AM) cards, which may be why it tumbled 2.13%. (Ms. Swift always could boost business by sending a note of apology to Adele, who she seriously side-eyed at the Golden Globes.)
Armstrong World Industries (AWI) slid 1.69% after an analyst said, "Sell"; send some stock options to liar Lance. As the disgraced cyclist took to Oprah’s couch, Italian sofa stock Natuzzi (NTZ) promptly surged 8.29%. Her Harpo Studios, where the interview occurred, is in Chicago, and many who feel betrayed by the cyclist suddenly wish him a long stay in one of the city’s beds.
Today in economics, the Federal Reserve releases its beige book of regional economic conditions at 2:00 p.m. Eastern. On the corporate front, Hump Day of a peak earnings week is here, with financial firms heavily to the fore. Bank of New York Mellon (BK), Charles Schwab (SCHW), Comerica (CMA), Goldman Sachs (GS), JPMorgan Chase (JPM), M&T Bank (MTB), Northern Trust (NTRS), and US Bancorp (USB) are all due to release results, along with eBay Inc. (EBAY).
Ameristar Casinos (ASCA): RBC Capital reduces its rating to Perform from Outperform.
Anglo American (PINK:AAUKY) The commodity company is trading sharply lower in London today after getting slashed to Sell from Hold at Société Générale, which has doubts about the impact of upcoming restructuring.
Anheuser-Busch InBev (BUD) The maker of brands including Michelob, Stella Artois, and Becks is now Reduce from Neutral at Nomura, which cites intense regulatory scrutiny of a proposed acquisition.
Apple (NASDAQ:AAPL): The recently slumping stock is cut to Sector Perform from Outperform at Pacific Crest, which sees fair value in the range of only $440 to $550. Earnings growth in 2014 is seen as constrained amid high-end smartphone saturation and slowing demand for incremental hardware innovations. (Separately, Bank of America-Merrill Lynch today lowered its Apple target to $630 from $720.)
(Also read: Is Apple in Its Sammy Hagar Era?)
ARM Holdings (ARMH): Misery clearly loves company; this key Apple supplier incurs its third downgrade of the week and is now Neutral from Buy at UBS.
Aspen Insurance (AHL): Sterne Agee downgrades the name to Neutral from Buy.
Boeing (BA): The Dow (^DJI) member is removed from Goldman Sachs’ list of Conviction Buys, sending it slumping ahead of the opening bell.
Brandywine Realty (BDN): The equity is moved to Market Perform from Outperform at JMP Securities.
Capital Lease Funding (LSE): LSE is lowered o Market Perform from Outperform at FBR Capital, whose new target price is $6.
Dell Inc. (DELL): The computer company, up sharply this week on LBO (Leveraged Buy Out) speculation, is downgraded to Hold from Buy at Argus due to resultant valuation issues.
Diamondback Energy (FANG): Shares, which touched all-time highs yesterday, are today moved to Neutral from Buy at Sterne Agee.
European Financials: ING Groep (ING) and Lloyds Banking Group (LYG) are each moved to Underperform from Neutral at Macquarie.
Ironwood Pharmaceuticals (IRWD): The drug stock is slashed to Sell from Neutral at UBS.
Kellogg (K): Credit Suisse cuts the cereal stock to Underperform from Neutral with an intact price objective of $55. Issues in Europe and a “tepid” outlook from company management are both seen as headwinds.
Master Limited Partnerships: Robert W. Baird gives Neutral-from-Outperform ratings reductions to Energy Transfer Equity (ETE) ($50 price objective), Inergy (NRGY) ($21), Plains All American (PAA) ($51), Southcross Energy Partners (SXE) ($26), and Sunoco Logistics (SXL) ($56.) Concerns include valuation, seasonality and low volatility.
Prudential Financial (PRU): The insurance outfit is now Neutral from Outperform at Macquarie, whose target is $62.
Vodafone (VOD): Troubled by the prospect of growth deterioration this year, Deutsche Bank takes the telecom titan to Hold from Buy.
Wells Fargo (WFC): Shares are now Neutral from Overweight at Atlantic Equities.
Wynn Resorts (WYNN): ISI Group cuts the casino company Neutral from Buy.
Yelp Inc. (YELP): The stock, which tumbled on Tuesday, is falling further ahead of the open after getting taken to Underperform from Market Perform at Northland Securities this morning. Heightened competition in social search following Facebook’s (FB) announcement is a concern.
(See also: Stock Upgrades: Bubble Wrap Owner Sealed Air Set for Nice Pop and New Stock Coverage: Winemaker Constellation Brands Reaches for the Stars.)
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