Schaeffer's Trading Floor Blog

Analyst Downgrades: Amazon.com, Inc., Citigroup Inc, and VIVUS, Inc.

Analysts downwardly revised their ratings on AMZN, C, and VVUS

by 4/3/2014 9:25 AM
Stocks quoted in this article:

Analysts are weighing in today on online marketplace Amazon.com, Inc. (NASDAQ:AMZN), financial firm Citigroup Inc (NYSE:C), and biopharmaceutical issue VIVUS, Inc. (NASDAQ:VVUS). Here's a quick roundup of today's bearish brokerage notes.

  • AMZN yesterday unveiled its Fire TV. However, the reception was lukewarm, with AMZN ending the session lower at $341.96, and at least one brokerage firm waxing pessimistic on the $99 box that delivers streaming content to TVs. Specifically, Wedbush essentially said Amazon.com, Inc. was late to the streaming game, opining that the company "missed an opportunity to introduce a highly differentiated device," and calling the debut "underwhelming." Should more brokerage firms follow suit, a round of downgrades could exacerbate AMZN's 14.3% year-to-date deficit. Currently, the stock harbors 23 "buy" or better ratings, compared to six "holds" and nary a "sell" to be found.

  • Sterne Agee downgraded C -- which is reportedly being investigated for fraud at its Mexican unit -- to "neutral" from "buy," and cut its price target to $52 from $61. In addition, the analysts also slashed their 2014 bottom-line earnings estimates for Citigroup Inc by 10%. (Separately, Oppenheimer lifted its price target on C to $66 from $63.) While downgrades are becoming more common for the stock in the wake of the Fed's capital-plans rejection, there's still plenty of room on the bearish bandwagon. In fact, 14 out of 21 covering brokerage firms maintain "strong buy" opinions on the shares, which have shed 7.4% so far this year. Meanwhile, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.59 sits in the 20th percentile of its annual range, suggesting short-term options traders are more call-biased than usual. More negative analyst attention and/or a mass exodus of option bulls could pressure C even lower on the charts.

  • Finally, VVUS was downgraded to "underweight" from "neutral" at Piper Jaffray ahead of the bell. The security has given up 31.9% year-to-date, and has underperformed the S&P 500 Index (SPX) by more than 37 percentage points during the past 60 sessions. It's no surprise, then, to find VIVUS, Inc. plagued by pessimism on Wall Street. The security sports just two "strong buy" recommendations, compared to five "holds" and three "sell" or worse ratings. Meanwhile, short interest accounts for more than one-third of the stock's total available float, and would take more than seven sessions to buy back, at VVUS' average daily trading volume. In pre-market action, the stock -- which closed at $6.18 yesterday -- is poised to drop more than 5%.

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