Even though the U.S. stock markets have calmed down a bit, the concerns that triggered the recent sell-off in the first place continue to remain. It might be expected that the market will not see so much volatility once its participants get an idea from the Fed on the timing of a rate hike, the lack of which is believed to be impeding the growth of the U.S economy. As the turmoil seems to be more or less behind, analysts at different investment and research firms keep altering their ratings on different companies. In the following article, we will discuss both Marvell Technology Group Ltd. (NASDAQ:MRVL) and H&R Block Inc (NYSE:HRB), which recently saw analyst action (and not the positive kind).
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Let’s begin our discussion with Marvell Technology Group Ltd. (NASDAQ:MRVL), which was downgraded to “Equal Weight” from “Overweight” by Morgan Stanley this morning. Similarly, the investment bank’s price target on the company was lowered to $9.50. Morgan Stanley is not the only firm that downgraded the company, which got clobbered on Friday after posting disappointing preliminary results for the second quarter of fiscal 2016, that ended August 1. Northland Capital reduced the price target on Marvell to $9 from $15, while the firm B. Riley downgraded the stock to “Neutral” from “Buy” and established a $10 price target. These downgrades were issued after Marvell disclosed its internal investigations into accounting irregularities. To be more specific, the company announced an internal probe by its Audit Committee into its revenue recognition practices. Several lawsuits have already been filed against the company concerning possible violations of federal securities laws in connection with the recent disclosure of potentially fraudulent accounting practices. The shares of Marvell have lost 2.60% during today’s trading session thus far, widening the year-to-date loss to nearly 41%. From the massive pool of hedge funds observed by Insider Monkey, Cliff Asness’ AQR Capital Management represents the largest shareholder of Marvell Technology Group Ltd. (NASDAQ:MRVL), holding nearly 12.27 million shares.
We can now move on to H&R Block Inc (NYSE:HRB), which was downgraded to “Neutral” from “Buy” by BTIG Research. The company’s shares reached a 52-week high of $39.29 per share on September 9, so BTIG had to adjust its rating on the stock. The company that provides tax preparation, banking, and other services recently posted its financial results for the first quarter of fiscal 2016 that ended July 31, which might explain the recent high. H&R Block reported total revenues of $137.72 million for the quarter, compared with $133.59 million reported a year ago. The company managed to deliver year-over-year revenue growth despite facing currency headwinds, which partially offset the higher product revenues. The company’s loss tightened noticeably year-over-year to $99.66 million from $116.23 million reported in the same quarter a year ago. Even more to that, H&R Block recently announced a $3.5 billion share buyback plan, so one should expect improved earnings per share (EPS) in the quarters ahead. In the meantime, First Eagle Investment Management, founded by Jean-Marie Eveillard, holds one of the most sizable stakes in H&R Block Inc (NYSE:HRB), which consists of 5.85 million shares.
Disclosure: None
