Schaeffer's Trading Floor Blog

Analyst Downgrades: eBay Inc (EBAY), FedEx Corporation (FDX), and Cliffs Natural Resources Inc

Analysts downwardly revised their ratings on EBAY, FDX, and CLF

by 4/18/2013 9:32 AM
Stocks quoted in this article:

Analysts are weighing in today on Internet auctioneer eBay Inc (NASDAQ:EBAY), package delivery service FedEx Corporation (NYSE:FDX), and mining issue Cliffs Natural Resources Inc (NYSE:CLF). Here's a quick roundup of today's bearish brokerage notes.

  • Despite a year-over-year gain of more than 56% to trade at $56.10, EBAY was on the bearish radar this morning, after the firm issued a weaker-than-anticipated second-quarter outlook on Wednesday. Macquarie downgraded the stock to "neutral" from "outperform," while Compass Point reduced its price target to $63 from $66. Elsewhere, eBay Inc has seen a rise in bearish speculation. Short interest on the security ramped up by close to 26% during the most recent reporting period alone. However, EBAY's pessimistic camp is far from crowded, as these shorted shares make up just 1% of the equity's available float.

  • FDX -- which is up a modest 2.6% year-to-date -- was cut to "underperform" from "sector perform" at RBC in pre-market activity. Nevertheless, most of the analysts covering FedEx Corporation harbor high expectations for the stock. No fewer than 16 brokerage firms have deemed the equity worthy of a "buy" or better endorsement, versus five "holds" and not a single "sell" suggestion. Even more telling, Thomson Reuters shows an average 12-month price target of $115.63, reflecting a premium of nearly 23% to Wednesday's closing price of $94.12. In other words, further downgrades and/or price-target cuts could be on the horizon for FDX.

  • As commodities continue to struggle, CLF saw its price target slashed to $22 from $28 at RBC today. The stock has shed close to 55% so far this year and is presently priced at $17.50, yet data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 50-day call/put volume ratio of 2.05 for Cliffs Natural Resources Inc -- confirming calls bought to open have more than doubled puts during the past 10 weeks. This ratio is just 3 percentage points shy of a yearly peak, conveying traders have been picking up calls over puts at a near annual-high clip in recent months.

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