The bulls held them off as long as they could, but the weight of all the recent gains and a drop in February’s durable goods orders gave the bears the opening they needed to rush through the gate. The S&P 500 ended the day at 2,061.10, down a hefty 1.46%, and below some key technical floors.
Some of the names leading that charge were Apollo Education Group Inc (NASDAQ:APOL), Qorvo Inc (NASDAQ:QRVO) and Tesla Motors Inc (NASDAQ:TSLA). Here’s what happened to put them at the bottom of the barrel.
Tesla Motors Inc (TSLA)
The good news is, CLSA analysts Andrew Fung and Emmanuel Rosner think Tesla Motors shares are worth more than their current price. The bad (and somewhat confusing news is), the duo downgraded TSLA anyway.
Fung and Rosner told investors on Tuesday morning they no longer feel TSLA stock is worth $275 per share. The new price target is $220, which is still 13% higher than Wednesday’s closing price around $194.50. Nevertheless, the pair saw fit to downgrade Tesla Motors from an “outperform” rating to an “underperform.”
It’s not unheard of, or deliberately misleading, for analysts to seemingly like and dislike a stock at the same time. A price target is an absolute, and a rating is a relative matter. Still, when it’s a high-profile and oft-debated name like Tesla Motors, these types of mixed messages are magnified tenfold.
Whatever the case, the market saw the glass as half-empty, sending TSLA stock down nearly 4%.
Qorvo Inc (QRVO)
Just for the record, Qorvo wasn’t alone in its demise today. The Philadelphia Semiconductor Index (SOX) was off nearly 4% today, with the bulk of these stocks moving deep into the red. QRVO was the worst of the worst among the major semiconductor stocks, however, losing more than 7% of its value.
The spark for the selling was a little fuzzy; traders simply extrapolated some alarming comments made regarding semiconductors as a whole, and the downgrade of Advanced Micro Devices, Inc. (NYSE:AMD). Specifically, UBS lowered its opinion on Advanced Micro Devices from a “neutral” to a “sell,” while Berenberg Bank analyst Adnaan Ahmad opined “But with the USD so strong, demand has got to waiver — and as that occurs, we think semi names in general will be ripe for a pullback.”
A mere whiff of trouble was enough to send semiconductor investors scurrying, with QRVO being the biggest and most vulnerable target in the bunch.
Apollo Education Group Inc (APOL)
Last but not least, Apollo Education Group was the worst of the market’s worst stocks on Wednesday, with APOL losing a stunning 28% of its value.
The prod for the pullback was lowered full-year guidance. The for-profit education company now believes revenue for the current fiscal year (ending in August) will roll in somewhere between $2.63 billion to $2.68 billion, versus prior guidance of somewhere between $2.74 billion to $2.8 billion. The revised revenue expectation is about 12% less than last fiscal year’s top line of $3 billion.
The overarching reason APOL shares may have cratered, however, is the increasing realization that it and all of its for-profit education peers are a lost cause.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
