Research Analysts’ Downgrades for October, 19th (BLK, CREE, DIS, ENH, ILMN, KSU, MGIC, NVDA, QGEN, WLDN)
BlackRock (NYSE:BLK) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “BlackRock’s third-quarter 2016 earnings surpassed the Zacks Consensus Estimate, primarily due to a decline in total expenses. However, lower revenues acted as a headwind. Further, increased dependence on overseas revenue and regulatory restrictions can negatively affect the company’s financials. In addition, increase in regulatory compliance costs, compensation costs as well as higher marketing costs are expected to keep expenses high, going forward. Nonetheless, the company has expanded largely via acquisitions, with most of its AUM growth attributable to the same. Moreover, the company remains well positioned to capitalize on opportunistic acquisitions, driven by its strong liquidity position. Also, its initiatives to gain market share in the ETF business are expected to drive revenue growth, going forward.”
Cree (NASDAQ:CREE) was downgraded by analysts at Stephens from an overweight rating to an equal weight rating.
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The Walt Disney (NYSE:DIS) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Disney’s primary cash cow, ESPN, has been under immense pressure as the Pay-TV landscape continues to change owing to migration of subscribers to online TV. Waning subscriptions will have a telling effect on the network’s ad revenues. Falling subscriber base and higher programming costs of these businesses have been a cause of worry for quite some time now. However, if we go by speculations ESPN is planning to sell its own streaming live TV package directly to customers. In an effort to attract online viewers and bring back the golden days of ESPN, the company has inked a deal with video streaming, data analytics as well as commerce management company BAMTech. On the other hand, sturdy movie business due to recent blockbusters and strong performance of its Parks & Resorts division continues to provide cushion to the stock. Disney is in the process of rolling out more themed attractions in parks and resorts.”
Endurance Specialty Holdings (NYSE:ENH) was downgraded by analysts at Macquarie from an outperform rating to a neutral rating.
Illumina (NASDAQ:ILMN) was downgraded by analysts at Zacks Investment Research from a hold rating to a strong sell rating. According to Zacks, “Illumina’s forecast of a slow paced recovery in its EMEA business, in 2016, indicates sluggish performance ahead in Europe, at least for some time. Moreover, factors like government funding cuts, fierce competition and escalating operating expenses might significantly hurt Illumina’s results, in the coming days. On a positive note, in the last reported second quarter the company posted outstanding numbers on the back of robust sequencing and array consumable growth. The company’s strong cash balance position buoys further optimism. Further, the company raised its EPS guidance for 2016 which is encouraging, raising hopes that the company will deliver higher profits in the remaining quarters of 2016.”
Kansas City Southern (NYSE:KSU) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Kansas City Southern’s third quarter results disappointed with earnings missing estimates and declining 7% on a year over year basis. Although revenue managed to beat estimates, it too declined from the same period in the prior year quarter. Moreover the company saw lower revenues across most major reporting segments. The company’s results were primarily impacted by weak energy markets. However other challenges such as floods, outages and service disruption in the company’s Mexico unit also contributed to the downside. The Mexican peso depreciation and lower U.S. fuel prices also hurt the company’s third quarter results. Operating ratio deteriorated to 66.9% in the reported quarter . Carload volumes declined 4% on a year-over-year basis.”
Magic Software Enterprises (NASDAQ:MGIC) was downgraded by analysts at Compass Point from a buy rating to a neutral rating.
Nvidia Corp. (NASDAQ:NVDA) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “NVIDIA offers digital media processors and related software for a wide range of visual computing platforms. Estimates have been stable lately ahead of the company’s 3Q17 earnings release. The company has positive record of earnings surprises in recent quarters. NVIDIA’s sustained efforts toward attaining robust position in several emerging industries such as Artificial Intelligence (AI), deep learning and driverless cars industry, makes us optimistic about its growth prospect. Furthermore, by expanding its business avenues, the company will be able to reduce its dependency on the PC industry, which is currently declining. NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs remain the positives. Nonetheless, competition from the likes of Intel and QUALCOMM Inc. remains a near-term headwind. Additionally, continuous decline in PC sales is a cause of concern for NVIDIA’s GPU segment.”
Qiagen NV (NASDAQ:QGEN) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Qiagen’s constant effort to strengthen its molecular diagnostics test menu is encouraging. The huge potential of the global in vitro diagnostics market also buoys optimism. Further, Qiagen’s expanded commercialization to the Asia-Pacific region is another upside. We are currently looking for Qiagen’s current launch of QIAseq cfDNA targeting liquid biopsy and hereditary diseases as well as its strategic partnership with Hamilton Robotics in the field of DNA fingerprinting. The company’s commitment to pay back its shareholders through increased share repurchase program is indicative of the solid cash position it holds. On the flip side, declining U.S. HPV sales may continue to impede the overall sales performance. Further, on the profitability front, Qiagen performed poorly on the back of declines in both gross and operating margins. Competitive landscape and strong reliance on collaborations also continue to be concerns.”
Willdan Group (NASDAQ:WLDN) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a sell rating. According to Zacks, “Willdan Group is a provider of professional technical and consulting services to utilities, private industry, and public agencies at all levels of government. Nationwide, they enable their clients to realize cost and energy savings by providing a wide range of specialized services. They assist their clients with a broad range of complementary services relating to: Energy Efficiency and Sustainability; Engineering and Planning; Economic and Financial Consulting; and National Preparedness and Interoperability. They operate their business through a network of offices located primarily in California and New York. They also have operations in Arizona, Colorado, Florida, Illinois, Kansas, Oregon, Texas, Washington and Washington, DC. “
Washington Real Estate Investment Trust (NYSE:WRE) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “WASHINGTON R.E. INV. TRUST is a self-administered qualified equity real estate investment trust. The Trust’s business consists of the ownership of income-producing real estate properties principally in the Greater Washington-Baltimore Region. The Trust has a fundamental strategy of regional focus, diversified property type ownership and conservative financial management. “
Zagg (NASDAQ:ZAGG) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “ZAGG Inc. designs, manufactures and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide. ZAGG’s flagship brand, the invisibleSHIELD, is a protective, high-tech patented film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices and other items. The patent-pending invisibleSHIELD application is the first scratch protection solution of its kind on the market, and has sold over one million units. Currently, ZAGG offers over 2,500 precision pre-cut designs with a lifetime replacement warranty through online channels, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories to its tech-savvy customer base, as well as an expanded array of invisibleSHIELD products for other industries. “
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