Schaeffer's Trading Floor Blog

Analyst Downgrades: Groupon Inc, Avon Products, Inc., and Target Corporation

Analysts downwardly revised their ratings on GRPN, AVP, and TGT

by 8/6/2014 9:13 AM
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Analysts are weighing in today on daily deals site Groupon Inc (NASDAQ:GRPN), cosmetics concern Avon Products, Inc. (NYSE:AVP), and retailer Target Corporation (NYSE:TGT). Here's a quick roundup of today's bearish brokerage notes on GRPN, AVP, and TGT.

  • GRPN's second-quarter revenue miss prompted a slew of bearish brokerage notes, with no fewer than nine firms weighing in on the stock. Wunderlich, for example, downwardly revised its rating to "hold" from "buy," and cut its price target by $4 to $6. On the charts, Groupon Inc has shed nearly 40% year-to-date to churn near $7.07, and ahead of the bell, the shares are pointed 16% lower. Bearish betting was popular on GRPN leading up to last night's results, as evidenced by the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.42, which ranks in the 90th percentile of its annual range.

  • BMO reduced its price target on AVP by $1 to $14, which still represents a premium to the stock's current perch at $13.33. Technically speaking, the security has been a long-term laggard, and is down 22.6% year-to-date. Not surprisingly, put players have been active in the equity's options pits, per AVP's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.78, which ranks in the bearishly skewed 61st annual percentile. Outside of the options pits, sentiment is tilted toward the skeptical side, as well, with short interest accounting for a healthy 6% of Avon Products, Inc.'s float, or 10 times the stock's average daily pace of trading.

  • TGT was slapped with a pair of price-target cuts after the company downwardly revised its second-quarter earnings outlook yesterday. Specifically, Morgan Stanley reduced its price target for the stock to $58 from $60, while Deutsche Bank cut its target price by $1 to $57. These bearish brokerage notes are nothing new for Target Corporation. At present, no fewer than 76% of covering analysts maintain a "hold" or worse suggestion toward the security, while the consensus 12-month price target of $60.22 stands at a slim 3.8% premium to yesterday's closing price of $58.03.

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