The first day of the new trading week was a wishy-washy one, with the S&P 500 bobbing in and out of the red as well as the black. When it was all said and done, though, the bulls and bears finished the day with a stalemate — the S&P 500 closed at 2001.76, up a mere 0.09%.
Shareholders of Netflix, Inc. (NASDAQ:NFLX), Cree, Inc. (NASDAQ:CREE) and Micron Technology, Inc. (NASDAQ:MU) would have gladly settled for a lethargic day, however. These three names were among the worst of the worst, although for understandable reasons. Here’s what traders need to know about each setback.
Netflix, Inc. (NFLX)
Streaming video giant Netflix may have been on the receiving end of some bullish comments of late, but it wasn’t enough to overcome the one piece of bad news that was unveiled on Friday, and had time to make the rounds this past weekend.
Long story made short, Investment Technology Group (NYSE:ITG) warned NFLX shareholders that it believes the current year’s domestic subscriber growth outlook from the company is too high. Specifically, Netflix believes it’s going to start a great year by adding 1.75 million subscribers in the first quarter alone. ITG doesn’t see it happening in Q1, or for the year.
Vetr is also not a fan of NFLX here, fanning the bearish flames by lowering its rating on the stock from a “Buy” to a “Hold,” and also lowering its target price to $105.19.
Netflix shares closed at $95.50 — down 6% for the session.
Micron Technology, Inc. (MU)
Just when it looked like Micron Technology shares might have finally rocked their way out of a rut, Nomura analyst Romit Shah comes along to up-end the recovery effort from MU with a downgrade of the stock.
At the heart of the concern is (still/once again) an oversupply of DRAM memory. Shah wrote:
“We met with Samsung, Hynix and Micron last week in Taiwan and Korea. Perfect storm in memory: DRAM demand is weak across all end markets, including PCs, mobile and servers. Prisoner’s dilemma: Supply growth is accelerating as Micron, Hynix and Samsung per our understanding have no intention of bringing down utilization. We believe DRAM ASPs are tracking down at least 30% for 2016, versus consensus of down mid to high teens.”
Nomura lowered its rating on the stock from “Neutral” to “Reduce,” sending MU down more than 2% on Monday.
Cree, Inc. (CREE)
Last but not least, LED lighting manufacturer Cree may be leading the pack in technological terms, but analysts remained unimpressed — so much so that one of them lowered its price target stock today.
Specifically, Canaccord Genuity reiterated its “Hold” reading on CREE, but lowered its target price from $26 to $24. Of particular concern to Canaccord Genuity is the possibility that the company’s components business has yet to actually hit bottom, even though a recent corporate restructuring of this division suggests only growth and success is in-store going forward.
The news sent CREE shares down nearly 9% today.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
