Why Juniper Networks, Inc. (JNPR), Starbucks Corporation (SBUX) and Micron Technology, Inc. (MU) Are 3 of Today’s Worst Stocks

Advertisement

Shrugging off yesterday’s concerning weakness, the bulls carried stocks higher again today … even without the benefit of any substantial economic news. The S&P 500 finished the day at 2061.72, up 0.97%. Crude oil gained an impressive 4.2%.

Why Juniper Networks, Inc. (JNPR), Micron Technology, Inc. (MU) and Starbucks Corporation (SBUX) Are 3 of Today's Worst StocksNot every name was able to get in on the rally effort, however. In fact, Juniper Networks, Inc. (NYSE:JNPR), Micron Technology, Inc. (NASDAQ:MU) and Starbucks Corporation (NASDAQ:SBUX) were all weak today in light of the market’s strength.

Here’s what went wrong.

Juniper Networks, Inc. (JNPR)

Networking technologies company Juniper Networks saw its stock get blasted on Tuesday, falling more than 7% after the company warned JNPR shareholders that its first fiscal quarter wouldn’t be as solid as previously expected.

As for the top line, Juniper Networks now expects to report between $1.09 billion and $1.10 billion, versus Q1 analyst expectations of $1.18 billion. As for earnings, the company is now calling for a profit of between 35 cents per share and 37 cents per share of JNPR, short of the consensus estimate of 45 cents.

The news was enough to prompt UBS to downgrade JNPR from a “Buy” to a “Hold”, and lower its target price on the stock from $31 to $25. Analyst Steve Milunovich noted “We have longer-term structural concerns with Juniper being caught between a much larger Cisco and a more nimble Arista.”

Micron Technology, Inc. (MU)

Today’s near 3% tumble from computer memory maker Micron Technology may not be earth-shattering, but relative to the broad market’s significant gains on Tuesday, the weakness is noteworthy. Making that weakness from MU even more noteworthy is the fact that during the same time frame, shares are down more than 4% compared to the market’s up.

In fact, today’s weakness from MU is just an extension of the selling that started yesterday on the heels of a double dose of bad news.

The bulk of the pullback was arguably driven by a Barron’s article, posted early Monday morning, explaining that the memory-chip market had been completely up-ended by Samsung Electronics, ultimately working against Micron.

Perhaps fanning the bearish flames a little more modestly was Moody’s rating of the company’s newest debt at Baa2. It’s still technically a so-called “investment grade” rating, but not considerably so. It loosely points to tacit concerns from the bond rating agency, even though Moody’s verbally viewed the company in a neutral light.

Starbucks Corporation (SBUX)

Micron wasn’t the only large-cap name to lose a couple of percentage points today. Starbucks shares also lost ground, though for a slightly different reason — it was downgraded.

Deutsche Bank did the deed, lowering its stance on SBUX from “Buy” to “Hold,” and simultaneously lowering its price target on the stock from $70 to $64 per share.

Analyst Brett Levy explained:

“We believe the combination of lofty near-term investors’ expectations, operational changes and a premium valuation creates a less favorable risk-reward on the shares.”

The operational changes Levy refers to are largely an overhauled rewards program that has been met by mixed opinions. Broadly speaking, the new plan doesn’t create as strong of a draw the previous plan did.

SBUX ended the day down more than 2%.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/04/why-juniper-networks-inc-jnpr-micron-technology-inc-mu-and-starbucks-corporation-sbux-are-3-of-todays-worst-stocks/.

©2024 InvestorPlace Media, LLC