Schaeffer's Trading Floor Blog

Analyst Downgrades: Starbucks Corporation, Chesapeake Energy Corporation, and FedEx Corporation

Analysts downwardly revised their ratings on SBUX, CHK, and FDX

by 3/11/2014 9:29 AM
Stocks quoted in this article:

Analysts are weighing in today on coffee specialist Starbucks Corporation (NASDAQ:SBUX), oil and gas company Chesapeake Energy Corporation (NYSE:CHK), and package delivery service FedEx Corporation (NYSE:FDX). Here's a quick roundup of today's bearish brokerage notes.

  • It's no wonder RBC cut its price target on SBUX to $88 from $90 this morning, considering the shares have shed 6.2% so far this year to trade at $73.56. Nevertheless, the average 12-month price target among analysts comes in at $88.20, denoting a 19.9% premium to the stock's current price. Furthermore, Starbucks Corporation maintains 18 "buy" or better endorsements, compared to just six "holds" and not a single "sell" suggestion. Should the shares continue to fall, more downgrades and/or price-target cuts may be in the cards, which could create additional technical headwinds.

  • After declaring quarterly common and preferred stock dividends this morning, CHK received a price-target cut to $25 from $30 at Bernstein. In the options pits of late, Chesapeake Energy Corporation -- which has jumped almost 4% over the past month to trade at $25.63 -- has seen near-annual-high levels of call activity among its short-term speculators, relatively speaking. In fact, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.71 ranks 2 percentage points from a 12-month low.

  • Bernstein reduced its price target for FDX to $141 from $144, following yesterday's news that Marvin Ellison will join the company's board of directors. Over the past month, FedEx Corporation has tacked on more than 6% to trade at $137.86, yet option players at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been more bearish than usual. During the past 10 trading days, the equity has racked up a put/call volume ratio of 1.45, which ranks in the 88th annual percentile. In other words, puts have been bought to open over calls at an accelerated rate recently.

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