Schaeffer's Trading Floor Blog

Analyst Downgrades: Tesla Motors Inc (TSLA), General Motors Company, and Cliffs Natural Resources Inc

Analysts downwardly revised their ratings on TSLA, GM, and CLF

by 3/26/2014 9:30 AM
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Analysts are weighing in today on automakers Tesla Motors Inc (NASDAQ:TSLA) and General Motors Company (NYSE:GM), plus mining company Cliffs Natural Resources Inc (NYSE:CLF). Here's a quick roundup of today's bearish brokerage notes.

  • UBS overlooked TSLA's impressive year-over-year gain of 482.3% to trade at $220.44, and initiated coverage on the stock with a "neutral" rating and a price target of $230 this morning. Investors have upped the bearish ante on Tesla Motors Inc recently, too. Short interest rose 8.2% during the most recent reporting period, and now accounts for a whopping 37% of the equity's available float. A continuation of TSLA's upward trajectory may cause some short-covering activity in the near term, which could create technical tailwinds for the shares.

  • GM -- which is down 15.6% year-to-date to trade at $34.51 -- saw its price target drop to $46 from $47 at Barclays this morning, amid ongoing investigations into the company's mass recall. General Motors Company could end up facing more technical trouble in the near term, as there is still plenty of room for additional downgrades and/or price-target cuts. Currently, 11 of the 13 covering analysts have deemed the stock worthy of a "buy" or better endorsement, and the average 12-month price target of $46.67 represents significant expected upside to the shares' current perch.

  • CLF -- which has plunged about 25% since the start of 2014 to trade at $19.66 -- received a price-target cut to $20 from $24 at UBS overnight. Right now, puts are the contracts of choice among short-term option players. In fact, Schaeffer's put/call open interest ratio (SOIR) for Cliffs Natural Resources Inc comes in at 1.39, ranking higher than 94% of comparable readings from the past year. In other words, put open interest (relative to call open interest) is nearing annual-high levels among options expiring within the next three months.

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