Schaeffer's Trading Floor Blog

Analyst Update: Devon Energy, Sherwin-Williams, and Aeropostale

Analysts adjusted their positions on DVN, SHW, and ARO

by 11/29/2012 11:12 AM
Stocks quoted in this article:

As stocks attempt to build on their early-morning pop, here is a quick update on today's latest brokerage notes, including changes for oil and gas producer Devon Energy Corporation (NYSE:DVN 53.41), all-things-paint namesake Sherwin-Williams Company (NYSE:SHW 155.87), and teen clothing designer Aeropostale, Inc. (NYSE:ARO 13.28).

  • DVN appears to be little moved by its downgrade to "neutral" from "add" at CapitalOne Southcoast, and is also doing very little to reconcile its overall deficit. On the charts, the stock has peeled back roughly 14% since January, and has lagged the broader S&P 500 Index (SPX) by nearly 10.5 percentage points over the past two months. Should this retreat continue, the mostly upbeat analysts could abandon ship. Currently, there are 11 "buy" or better endorsements, versus 10 tepid "holds" and not a single "sell" suggestion.

  • SHW has slipped some 0.9% today, digesting this morning's brokerage notes. Specifically, Nomura cut the stock from its "conviction buy" list (after dropping it to "neutral from "buy" just yesterday), while Morgan Stanley initiated coverage with an "equalweight." Even though SHW is sitting on an impressive 75% year-to-date return, there is plenty of negativity levied against the shares. The 10-day put/call volume ratio of 3.68 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 74th percentile of its annual range, signaling that speculators have scooped up bearish bets over bullish at an accelerated clip recently. Elsewhere, 77% of the 13 analysts following SHW have doled out "hold" or worse ratings.

  • After last night's warning about a potential lag in its fiscal fourth quarter (which includes holiday shopping), Caris slapped ARO with a ratings cut to "above average" from "buy" this morning. So far today, the stock has faltered more than 6%, and is exacerbating its roughly 13% 2012 shortfall. And this technical and fundamental predicament could elicit a change to ARO's optimistic sentiment backdrop. The average 12-month price target of $17.18 is a 29.4% premium to its current trading level. Meanwhile, there are 11 "buy" or better endorsements, eight middling "holds," and just one "strong sell."

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