Major Stocks with Analysts’ Downgrades: S, UPS, CLWR, CELG

PUBLISHED: 16 Oct 2012 @ 19:56 | Comments (0) | More info about Ed Liston

Analysts’ opinion about a stock carries a lot of weight. However, the parameter is not entirely foolproof. On an average, most of the analysts shy away from passing negative or sell recommendation for a stock. Therefore, I prefer to take analysts recommendations with a pinch of salt. At the very same time, I also keep my ears open to any change made in the analysts’ recommendation about a stock, especially when the change in opinion is negative.

Given the cautionary stance taken by analysts, any downgrade of a stock is something you should take very seriously. Following is the list of major stocks which have recently receive the downgrade. However, the downgrade itself does not automatically mean that you should shun the stock. However, it can prompt you to carry out your own due diligence:

Sprint Nextel (NYSE:S): The stock is currently trading at $5.71, up 0.35 percent from its previous close of $5.69. The stock has traded in the range of $2.10 and $6.04 in the past 52 weeks. However, the stock is trading in line with its 20 days moving average price and 50 days moving average price of $5.70. The company recently sold its major stake to Softbank and the stock has been consequently downgraded by Hudson Square Research to Hold position. However, at the very same time, it has also been upgraded from Underperform to Neutral by Robert W. Baird. Baird has also raised the stock’s price target to $6, up from previous target of $4. Sprint commands the market capitalization of $17.12 billion and its stock is trading at the beta of 1.13.

United Parcel Service Inc. (NYSE:UPS): The company is involved in the business of package delivery and logistics services. United Parcel Service stock is currently trading at $73.36, up 1.06 percent from its previous close of $72.59. The stock had opened at $72.42 and has traded in the range of $72.30 and $73.37 in the current trading session. United Parcel Service stock commands the Price Earnings ratio of 18.42. The stock has been downgraded by Robert W. Baird from Outperform to Neutral. The research firm also slashed the price target from $84 to $80. Earlier, it was downgraded by RBC Capital from Outperform to Sector Perform. RBC also slashed the target price to $75, down from previous target of $84. The company is currently struggling to complete its TNT deal and is looking to present its case in front of EU. The Union is likely to raise objections on the ground of violation of antitrust laws. The meeting is likely to take place this week. The company stock is trading above its 20 days moving average price of $73.31 and 50 days moving average price of $73.23.

Clearwire (NASDAQ:CLWR): The company was rumored to be taken over by Sprint Nextel. However, in the light of new circumstances involving Sprint’s stake sale to Softbank, Clearwire acquisition seems to be out of question for the time being. Clearwire is currently trading at $2.22, down 17.66 percent from its previous close of $2.69. The stock has traded in the range of $2.16 and $2.40 in the current trading session. However, the stock is trading below its 20 days moving average price of $2.23 and 50 days moving average price of $2.27. The tumble in the stock price is accompanied by rating downgrade as well. The stock has been downgraded by DA Davidson from Buy to Neutral. Clearwire has market capitalization of $3.23 billion and is involved in the business of providing fourth generation wireless broadband services. The company is based out of Washington.

Celgene Corporation (NASDAQ:CELG): The company stock is currently trading at $78.08, up 0.14 percent from its previous close of $77.97. The stock had opened at $78.09 and has traded in the range of $77.54 and $78.45 in the current trading session. Celgene stock commands the Price Earnings ratio of 22.74. The stock has been downgraded from Outperform to Perform by Oppenheimer. Celgene is a biopharmaceutical company and recently received FDA approval for its product ABRAXANE for the treatment of non-small cell lung cancer. The company’s downgrade is mainly due to rumors about potential takeover deals to be undertaken by it. Oppeheimer analyst doubted the efficacy of any pricey acquisition. The stock is trading at beta of 0.50 and the company’s market capitalization stands at $33.69 billion.

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