The week of May 20 started off on the right foot with the the Dow Jones Industrial Average rising to over 17,700, but mixed economic reports and a Federal Reserve bias coming back toward tightening interest rates put the Dow barely in the red at 17,500.94. All in all, it wasn’t enough of a weekly move to count for very much. That wasn’t so for individual stocks.
24/7 Wall St. tracks many analyst upgrades and downgrades each day, which turns out to be hundreds of analyst calls per week. There are usually more Buy ratings than Sell ratings, and many investors have a hard time of really understanding when or why to sell.
The past two weeks have brought several Sell ratings that stood out above and beyond the other calls. Again, investors are not told to sell by brokers and analysts as often as they are told to buy. Some “sell” ratings have other names: underperform, underweight and the like. Just understand that they generally mean “Sell!”
The great processor giant and Dow component Intel Corp. (NASDAQ: INTC) was initiated with an Underperform rating, again as Wall Street analyst code for “sell,” at CLSA. The price target was set at $30, which indicates a sideways pattern from Friday’s $30.15 close and versus the $30.39 close before the call was made. Intel was viewed as an Apple laggard and as a company that needs to take a different approach and have a better focus on individual companies ahead.
Intel’s consensus analyst price target is $35.20 (down from $35.35 earlier in the week), and the stock has a 52-week trading range of $24.87 to $35.59.
The call on General Electric Co. (NYSE: GE) dates back to May 12, but the stock has been stuck in the mud ever since despite a severe rally from trough to peak in recent months. The team at JPMorgan assigned an Underweight rating and issued a downside price target of $27 in the call, implying roughly 11% downside from the prior $30.34 closing price (without consideration of the dividend yield).
GE shares have been stuck and closed at $29.26 on Friday, after news that an activist investor had lowered his big stake. This was the same as a Sell rating, and JPMorgan warned that GE’s 2018 earnings targets might just be too good to come true and the firm sees continued overhang from the energy sector.
GE’s most recent $29.56 price falls in a 52-week range of $19.37 to $32.05, and the $27 target from JPMorgan compares to a consensus price target of $32.79.