Schaeffer's Trading Floor Blog

Analyst Downgrades: Herbalife Ltd., Transocean LTD, and Tibco Software Inc.

Analysts downwardly revised their ratings on HLF, RIG, and TIBX

by 3/21/2014 9:12 AM
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Analysts are weighing in today on nutritional products distributor Herbalife Ltd. (NYSE:HLF), oil-and-gas name Transocean LTD (NYSE:RIG), and infrastructure software developer Tibco Software Inc. (NASDAQ:TIBX). Here's a quick roundup of today's bearish brokerage notes.

  • Amid continued controversy over its business practices, HLF has given back more than 35% of its value in 2014 to rest at $50.79. Argus believes the weakness could continue, and downgraded its rating on the shares to "hold" from "buy" this morning. Meanwhile, Carl Icahn -- the company's largest (and potentially most vocal) shareholder -- has reportedly said he will not buy additional shares as he looks to take a larger presence on the HLF board. Not surprisingly, Herbalife Ltd. remains a popular choice among short sellers, as nearly 30% of its float is sold short, amounting to a short-interest ratio of 8.5 days to cover. Short-term options players have also drifted to the bearish camp, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.59, which stands higher than 93% of comparable readings captured during the last 12 months.

  • Jefferies weighed in on a number of energy concerns this morning, including cutting its target price for RIG to $42, or south of the consensus 12-month outlook of $43.97. UBS also chimed in, reducing its price target to $39 from $40. The brokerage bunch is largely skeptical toward the stock, collectively awarding just five "buy" or better ratings, versus 13 "holds" and four "strong sells." Transocean LTD has been drifting steadily lower since its mid-November peak of $55.74, dropping 28% during the ensuing four-plus months to rest at $40.12.

  • Despite last night reporting fiscal first-quarter earnings and sales that topped expectations, TIBX saw its price target lowered by $2 to $27 at Susquehanna today, though the brokerage still maintained a "positive" rating. During the last 12 months, Tibco Software Inc. has made little net headway, slipping shy of 7% to rest at $21.59. Meanwhile, in the options pits, long puts have been in increasing demand, compared to long calls. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio stands at 5.71, or 1 percentage point away from an annual peak.

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