Analyst Downgrades: Netflix, Microsoft, and FXCM
Analysts downwardly revised their ratings on Netflix, Inc. (NFLX), Microsoft Corporation (MSFT), and FXCM Inc (FXCM)
Analysts downwardly revised their ratings on Netflix, Inc. (NFLX), Microsoft Corporation (MSFT), and FXCM Inc (FXCM)
Analysts are weighing in today on streaming video giant Netflix, Inc. (NASDAQ:NFLX), tech concern Microsoft Corporation (NASDAQ:MSFT), and monetary exchange platform FXCM Inc (NYSE:FXCM). Here's a quick roundup of today's bearish brokerage notes on NFLX, MSFT, and FXCM.
- NFLX is hurting this morning, after Evercore ISI slashed its price target on the shares by $70 to $380 and lowered its outlook to "sell" from "hold," citing stronger competition and a growing need for investment. As a result, the equity is off 2.9% this morning at $425.65 -- a change of pace for a stock that's outperformed the S&P 500 Index (SPX) by 33 percentage points over the past three months. Short-term speculators have had their eyes on puts, as Netflix, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 1.40 is higher than 94% of all similar readings from the past year. In other words, short-term options traders are more put-skewed than normal.
- MSFT is up 0.2 this morning at $41.48, despite UBS' price-target cut to $49 from $52 (though it reiterated a "buy" rating). Since gapping lower in late January following a poorly received earnings report, the shares have dropped over 12%. In the options pits, speculators have remained stubbornly bullish, as Microsoft Corporation's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.10 is only 4 percentage points from an annual high. This tells us calls have been bought to open over puts at a faster-than-usual rate in recent months. If the security can't turn things around on the charts, a reversal of speculator sentiment could pressure it lower.
- FXCM has fallen 8.5% this morning to $2.36, due to a round of bearish analyst attention. Specifically, KBW cut the equity to "underperform" from "market perform" -- citing a wider-than-estimated customer deficit and lackluster February activity -- while Credit Suisse slashed its price target to $2.60 from $3.75. The shares have gotten annihilated this year, losing roughly 86% of their value. Analysts have taken a skeptical stance toward FXCM Inc. All five covering brokerage firms rate the equity a "hold" or worse.
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