Schaeffer's Trading Floor Blog

Analyst Downgrades: Nokia Corporation (ADR), Barrick Gold Corporation (USA), and Yelp Inc

Analysts downwardly revised their ratings on NOK, ABX, and YELP

by 5/1/2014 9:29 AM
Stocks quoted in this article:

Analysts are weighing in today on Finland-based telecom Nokia Corporation (ADR) (NYSE:NOK), gold miner Barrick Gold Corporation (USA) (NYSE:ABX), and web-based review portal Yelp Inc (NYSE:YELP). Here's a quick roundup of today's bearish brokerage notes.

  • Although NOK shares are still trading almost 125% higher than at the same point last year, their performance in 2014 has not been impressive. Even after a post-earnings bounce and a pair of price-target hikes, the stock has shed roughly 7.5% in the last four months to rest at $7.50, and has traded within a narrow sideways range since early February. Against this technical backdrop, Deutsche Bank lowered its price target on the telecom provider to 5.20 euros from 5.25 euros. Despite the recent stagnation in Nokia Corporation (ADR) shares, call buyers remain notably active. During the last 50 trading days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have scooped up more than three calls for each put. The resulting call/put volume ratio of 3.35 ranks higher than 64% of all annual readings, suggesting a slightly elevated demand for long calls, relative to puts.

  • With recent hopes of a partnership with Newmont Mining Corp (NYSE:NEM) quickly unraveling, and the company's latest earnings report getting a chilly reception on Wednesday, ABX faced more bad news this morning, as a trio of brokerage firms reduced their respective price targets. Among the firms was TD Securities, which trimmed its outlook by $1 to $20. The stock has dropped 18.6% off its Feb. 25 year-to-date high of $21.45 to rest at $17.47, so it's no surprise that Wall Street isn't crowding the bullish camp. Currently, Barrick Gold Corporation (USA) boasts just two ratings of "buy" or better, versus 15 "holds" and a single "strong sell" rating.

  • Following last night's relatively upbeat turn in the earnings confessional, YELP was greeted with a host of brokerage attention today. While a number of firms (including RBC and Piper Jaffray) offered votes of confidence, more took a glass-half-empty view. Goldman Sachs, for example, lowered its price target to $66 from $81, while UBS cut its outlook to $60 from $84. Unfazed by these adjustments, Yelp Inc shares are poised to open 9% higher out of the gate, which should be good news for yesterday's last-minute call buyers. If YELP continues to gain ground following its earnings-induced lift, short sellers may begin to look for the exits. After surging by 14.4% in the last reporting period, short interest now accounts for nearly 11% of YELP's available float.

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