6 HighProfile and Controversial Analyst Downgrades Apple Inc (NASDAQ AAPL)

Post on: 3 Апрель, 2015 No Comment

6 HighProfile and Controversial Analyst Downgrades Apple Inc (NASDAQ AAPL)

Investors hear it in the financial media all the time: Strong Buy, Buy, Outperform, Overweight and the like. What they hear less of than brokerage firms telling them to buy stocks is when it is time to get out. Many brokers and investors alike just have a hard time taking profits or taking a loss to move on to the next thing. It is less frequent that investors hear a firm say sell or Lock in those gains now!

24/7 Wall St. has tracked six high-profile downgrades that took place this last week. Some may not sound like Sell ratings on the surface, but some certainly do. These high-profile downgrades also had some controversy around them because the analysts stuck their necks out and could look pretty silly if the investment thesis turned out to be wrong.

We already know that selling creates two events, outside of commissions and trading fees that is. If there is a profit it creates a taxable event, all other positions considered static. If the stock is sold at a loss, it means that the broker or investor has to admit that they were wrong. These are the six high-profile and controversial downgrades covered by 24/7 Wall St. from this last week.

Apple Inc. (NASDAQ: AAPL) was a freight train that just could not be stopped ahead of its iPhone 6 launch announcement expected in the week ahead. That freight train was finally stopped as two analysts came out very cautiously here. Oppenheimer transferred coverage with a Perform rating, yet most of the commentary sounded like Buy ratings (Outperform in their case) rather than Hold equivalents.

The larger Apple controversy came from Pacific Crest, which sort of had a downgrade-light call ahead of the release. It said Apple will have to blow the doors off the hinges with massive new profit potential to keep from being downgraded, and the firm even warned that it is ready to downgrade the stock from its current rating of Outperform if the news is not phenomenal on the heels of a 40% run since late April. It is not usual for analysts to warn that they will downgrade a stock. Apple shares peaked at $103.74, but the close of $98.97 on Friday was nearly 5% off of that high and close to $30 billion in market cap wiped out.

6 HighProfile and Controversial Analyst Downgrades Apple Inc (NASDAQ AAPL)

ALSO READ: 9 Analyst Stocks Under $10 With Massive Upside Potential

Bank of America Corp. (NYSE: BAC) was downgraded on Thursday by Nomura to Neutral from Buy and with a $17 price target. This may not sound like a Sell rating equivalent on the surface, but this is a key call. Bank of Americas massive $16+ billion settlement is supposed to get it out of the woods and is supposed to help it join other banks in its quest to reach book value again.

Bank of Americas stated book value is $21.16 per share, its tangible book value is $14.24 per share and the bank has already been cleared for a normalization of payouts with its first dividend hike. Most analysts were upbeat after the settlement, but not Nomura. Maybe our September 2 take that Bank of America is still in big trouble had more merit to it than the trading activity most of this past week had indicated.


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