UBS today lowered its rating of Quicksilver Resources Inc. (KWK - 8.64) to "neutral" from "buy," and cut its price target to $11 from $13. The firm based this reduction on its lower overall view about the price of natural gas, and KWK's future financial growth potential.
There could be additional price-target cuts in store for KWK in the future. The consensus 12-month price target for the stock -- as calculated by Thomson Reuters -- rests at $14.92, representing a hefty premium of roughly 55% to Wednesday's close of $9.61.
Otherwise, the brokerage bunch seems to lean slightly bearish toward KWK. Specifically, Zacks tallies 11 "holds" and one "strong sell" suggestion, versus eight "strong buy" recommendations. Should any of the lingering bulls abandon ship, however, a wave of downgrades could also drag on the shares.
There looks to be plenty of negativity elsewhere on the Street. Even though short interest on the security fell by 13% during the most recent reporting period, it still accounts for 12.7% of the stock's available float. In fact, at the security's average pace of trading, it would take nearly three full sessions to buy back all of these bearish bets.
Options traders appear to be pessimistic, as well. During the past 10 days, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1.53 puts for every call on the equity. This ratio arrives just two percentage points away from a pessimistic peak, signaling that traders on these exchanges have rarely purchased bearish bets over bullish at a faster pace during the past year.
Mid-Caps Nearing a Triple of March 2009 Lows
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