Saint Patrick’s Day was only lucky for the NASDAQ, which closed a tad higher on Tuesday. The more broad-based S&P 500 finished the session in the red, down 0.33% to close at 2,074.28 on a relatively slow news day. Either way, most investors remain mentally on hold, waiting to hear what Janet Yellen has to say about interest rates on Wednesday.
Himax Technologies, Inc. (NASDAQ:HIMX), Micron Technology, Inc. (NASDAQ:MU) and Electronic Arts Inc. (NASDAQ:EA), though, didn’t fare nearly as well. Here’s what investors need to know.
Micron Technology (MU)
A few too many analysts voiced pessimistic opinions about Micron Technology yesterday and today, and the stock paid the price for it. Indeed, given the number and explanation of doubts about the computer memory maker’s foreseeable future, it’s a miracle MU only lost 3% of its value on Tuesday.
Deutsche Bank got the ball rolling Monday afternoon when analyst Sidney Ho lowered his profit forecast for Q3 to 73 cents per share of MU, versus an analyst average of 87 cents. A currently weak market for memory chips was cited as the core cause for Ho’s lowered outlook.
RBC Capital Markets followed up today, dropping its price target for MU from $44 to $40, while also sharply lowering its full-year EPS outlook for Micron Technology.The concern from RBC Capital Markets was the same Deutsche Bank’s Sidney Ho had — tepid DRAM demand.
Electronic Arts (EA)
Electronic Arts, one of the more dominant names in the admittedly crowded mobile gaming industry, saw that dominance threatened today, and investors are none too happy about it.
The threat came from Nintendo Co., Ltd (OTCMKTS:NTDOY), which officially announced on Tuesday it would soon be launching new mobile-based games featuring a mix of old, iconic characters like Mario and Link. While U.S.-listed Nintendo shares jumped more than 30% on the news, EA fell 3%, as shareholders recognized that mobile gaming was the bulk of EA’s growth opportunity.
Himax Technologies (HIMX)
To say the rug got pulled out from underneath fans and investors of Himax Technologies would be an understatement. Just last Friday, HIMX shares were starting to act like they were finally wanting to move higher after a string of false starts led to a months-long stretch of no net movement. Between yesterday’s 6% stumble and today’s 8% pullback, though, HIMX shares are off nearly 16% for the week, into new multi-week low territory.
The spark for today’s selling was a downgrade from Merrill Lynch. The investment bank and brokerage house cut its rating on HIMX to an underperform, lowering its target price to $7.
Northland Securities was the first to put the pullback into motion though, after warning investors on Monday that Himax Technologies was likely to post Q1 results at the low end of the company’s previous guidance. Weak results from some of its customers led Northland to think Himax was seeing great demand for its display technology.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
