Yup, you are right. Last time S&P cut their target this much it was time to buy. Analysts are under significant pressure to lower price targets when the stock doesn't behave correctly. I used to work for a mutual fund and it is hilarious how firms have to downgrade a stock because it is going lower. The stock gets safer and safer the lower it goes---not the opposite!
Also the the $5 threshold will hopefully create forced selling. Large funds do many illogical things due to certain manadates and the individual investor can take advantage of these opportunities if they are rational.