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Analysts are weighing in today on automaker General Motors Company (NYSE:GM), financial firm Goldman Sachs Group Inc (NYSE:GS), and fertilizer concern Potash Corp./Saskatchewan (USA) (NYSE:POT). Here's a quick roundup of today's bearish brokerage notes.
- As GM CEO Mary Barra heads to Capitol Hill to answer for her company's slow response to fatal ignition-switch flaws, a couple of brokerage firms weighed in on the stock. Specifically, J.P. Morgan Securities cut its price target to $50 from $52, while UBS trimmed its price target to $49 from $51. General Motors Company shares have underperformed the broader S&P 500 Index (SPX) by more than 16 percentage points during the past three months, and have given up 15.8% so far in 2014 to trade at $34.42. Nevertheless, 11 out of 13 analysts consider the stock a "buy" or better, with not a "sell" rating in sight. Plus, calls remain the options of choice among short-term speculators, as the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.59 ranks in the 40th percentile of its annual range. A reversal in sentiment among analysts and/or options bulls could translate into contrarian headwinds for GM.
- Susquehanna slashed its price target on GS to $188 from $206 this morning. However, negative notes are nothing new for the blue chip, as just three analysts offer up "buy" or better recommendations, compared to 13 "hold" or worse suggestions. Elsewhere, options traders are picking up GS calls at a faster-than-usual clip ahead of the company's turn in the earnings spotlight on Thursday, April 17. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day call/put volume ratio of 2.12 -- in the 65th percentile of its annual range. Still, Goldman Sachs Group Inc's short-term contracts are a relative bargain right now, as the equity's Schaeffer's Volatility Index (SVI) of 21% ranks in the bottom third of its annual range. GS closed at $163.85 on Monday.
- Finally, POT was downgraded to "hold" from "buy" at Cantor ahead of the bell. The shares have added 9.9% in 2014, closing at $36.22 yesterday, and have outpaced the SPX by almost 9 percentage points during the past 40 sessions. As such, option buyers have displayed a healthier-than-usual appetite for POT calls over puts during the past 10 weeks, as the stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 3.31 sits just 8 percentage points from an annual high. On the other hand, it would take roughly four sessions to buy back all of the Potash Corp./Saskatchewan (USA) shorted shares, at the stock's average pace of trading -- suggesting some of the recent call buying could be the work of short sellers looking to hedge their bearish bets.