Schaeffer's Trading Floor Blog

Analyst Downgrades: Chesapeake Energy, VIVUS, and Mosaic

Analysts downwardly revised their ratings on CHK, VVUS, and MOS

by 2/22/2013 9:03 AM
Stocks quoted in this article:

Analysts are weighing in today on gas & oil concern Chesapeake Energy Corporation (NYSE:CHK - 20.19), biopharmaceutical firm VIVUS, Inc. (NASDAQ:VVUS - 12.88), and agricultural chemical producer Mosaic Co (NYSE:MOS - 57.73). Here's a quick roundup of today's bearish brokerage notes.

  • CHK received a price-target cut to $26 from $28 at Canaccord Genuity ahead of the open, despite revealing quarterly earnings that bested consensus bottom-line estimates Thursday morning. The security has advanced about 21.5% so far this year -- while also besting the broader S&P 500 Index (SPX) by nearly 13 percentage points over the past 40 sessions -- yet most of the covering analysts maintain an air of caution toward CHK. The equity currently sports nine "strong buys" and one "buy" recommendation, versus 17 lukewarm "hold" ratings.

  • Analysts at Lazard reduced their price target for VVUS to $23 from $27 today, on the heels of yesterday's news that a European Medicines Agency committee confirmed its decision to deny approval of the company's weight-loss drug, Qsiva. The security has surrendered more than 31% during the last 12 months, which could explain the bevy of pessimism levied against VVUS. Short interest on the stock spiked by close to 14% over the past two reporting periods, and now accounts for a formidable 29% of the equity's float. It would take more than seven days to cover these shorted shares, at the security's average pace of trading.

  • MOS -- which hovers just 2 percentage points above breakeven in 2013 -- was downgraded to "hold" from "buy" at Dahlman Rose in pre-market activity. Meanwhile, call buying has been flourishing on the security. MOS' 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 3.37, confirming calls bought to open have more than tripled puts during the last two weeks. This ratio ranks higher than 77% of similar readings taken within the past year, reflecting a healthier-than-usual appetite for calls over puts lately.

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