Schaeffer's Trading Floor Blog

Analyst Downgrades: United States Steel Corporation, Sohu.com Inc, and Whole Foods Market, Inc.

Analysts downwardly revised their ratings on X, SOHU, and WFM

by 2/11/2014 9:38 AM
Stocks quoted in this article:

Analysts are weighing in today on steel producer United States Steel Corporation (NYSE:X), Chinese Web company Sohu.com Inc (NASDAQ:SOHU), and grocery chain Whole Foods Market, Inc. (NASDAQ:WFM). Here's a quick roundup of today's bearish brokerage notes.

  • Though X has gained close to 36% over the past six months to trade at $25.59, the stock was downgraded to "sell" from "neutral," and received a price-target cut to $23 from $28 at Citigroup this morning. Elsewhere, the majority of the brokerage bunch is skeptical, as well, with nine of the 14 covering analysts dishing out "hold" or worse ratings. Plus, the consensus 12-month price target of $28.92 denotes a slim premium to the shares' current perch. Given its long-term upward trajectory, United States Steel Corporation may see a change of heart among analysts, which could end up benefiting the equity on the charts.

  • SOHU outlined a weaker-than-expected first-quarter earnings guidance yesterday, leading Morgan Stanley to downgrade the equity to "underweight" from "equal weight" earlier today. As of yesterday, the stock boasted a year-over-year climb of nearly 52% to perch at $69.74. Regardless, it appears option players expected bad news, as Sohu.com Inc's Schaeffer's put/call open interest ratio (SOIR) of 0.87 is just 4 percentage points short of a 12-month peak, demonstrating short-term speculators have rarely been more put-heavy toward the stock, compared to the past year.

  • WFM saw its price target cut to $61 from $66 at UBS, ahead of the company's turn in the earnings confessional tomorrow evening. On the charts, the stock has had a dismal 2014 so far, shedding 4.3% to trade at $55.34. Still, short-term option players are very call-biased toward Whole Foods Market, Inc. ahead of the quarterly event, as the equity's SOIR of 0.58 ranks lower than 99% of comparable readings from the past year. Should WFM continue to disappoint on the charts, and/or report weaker-than-expected fiscal first-quarter results, a capitulation of bullish bettors may be in the cards, which could serve as resistance for the shares.

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