Schaeffer's Trading Floor Blog

Analyst Downgrades: Transocean LTD, Panera Bread Co, and Joy Global Inc.

Analysts downwardly revised their ratings on RIG, PNRA, and JOY

by 5/31/2013 9:10 AM
Stocks quoted in this article:

Analysts are weighing in today on offshore drilling firm Transocean LTD (NYSE:RIG), bakery-cafe chain Panera Bread Co (NASDAQ:PNRA), and mining equipment manufacturer Joy Global Inc. (NYSE:JOY). Here's a quick roundup of today's bearish brokerage notes.

  • Despite posting a 52-week gain of close to 27% to hover at $51.72, RIG saw its price target trimmed to $59 from $60 at Jefferies today -- a contrast to Wednesday's analyst attention. Meanwhile, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 5.48 for Transocean LTD, indicating traders have bought to open more than five calls for every put during the past two weeks. This ratio ranks higher than 88% of comparable annual readings, reflecting a stronger-than-usual preference for calls over puts.

  • PNRA -- which has climbed 22% in 2013 to linger in the $193.82 neighborhood -- was downgraded to "neutral" from "buy" at Lazard Capital ahead of the open. This downbeat view of Panera Bread Co is prevalent among the short-term options crowd, as well. The stock's Schaeffer's put/call open interest ratio (SOIR) stands at 2.26, with puts more than doubling calls among options scheduled to expire within the next three months. In fact, this ratio is just 1 percentage point shy of an annual high, conveying near-term traders have rarely been more bearishly aligned toward the security during the last 12 months.

  • JOY received price-target cuts at Raymond James (to $62.50 from $67) and BMO (to $55 from $65) this morning, after reporting a 15% drop in quarterly earnings and lowering its full-year guidance yesterday. Joy Global Inc. is priced at $55.43, having shed about 13% year-to-date, so it's no surprise that skepticism is running high toward the equity. Short interest surged by about 12% during the last two reporting periods, and now these bearish plays account for a healthy 9% of the stock's available float. It would take nearly a week to cover these shorted shares, at the security's average pace of trading.

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