Schaeffer's Trading Floor Blog

Analyst Update: MetroPCS Communications, Marathon Oil, and Kohl's

Analysts adjusted their positions on PCS, MRO, and KSS

by 11/30/2012 11:03 AM
Stocks quoted in this article:

Markets are teetering around the breakeven line in late-morning trading, as anxieties continue to mount over the U.S. debt ceiling. With the last session of November underway, here's a quick update on today's latest brokerage notes, including changes for wireless broadband provider MetroPCS Communications Inc (NYSE:PCS – 10.52), international energy company Marathon Oil Corporation (NYSE:MRO – 30.86), and department-store operator Kohl's Corporation (NYSE:KSS – 44.72).

  • PCS is up more than 3% so far today, following a price-target hike to $11 from $7 at RBC. However, this upbeat note arrives in the face of firm pessimism on the sentiment front. Of the 19 analysts following the telecom concern, 15 maintain a "hold" or worse recommendation. Elsewhere, short interest soared 99% during the past month, and now accounts for 9% of the security's available float. At PCS' average pace of trading, it would take nearly one week for all of these shorted shares to unwind. Against this backdrop, it's possible that the recent call buying on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) could be less than optimistic. The stock's 10-day call/put volume ratio of 5.50 is an uptick from its 20-day ratio of 3.80, which points to potential hedging by the shorts.

  • Well Fargo weighed in on several names in the oil space, initiating coverage on MRO with an "outperform" rating. Since tagging a 2012 low of $23.17 in mid-June, the shares have climbed some 24%, bouncing from their 50-day trendline several times during the past couple of months. Despite this recent rally, the short-term options crowd is more put-heavy than usual, as evidenced by MRO's Schaeffer's put/call open interest ratio (SOIR) of 1.52, which registers in the 90th annual percentile.

  • Finally, KSS was hit with a negative note today, as Nomura lowered its price target by $4 to $46, and kept its "neutral" rating. This move came on the heels of a disappointing 5.6% drop in November same-store sales for the family-oriented retailer. The stock is sitting on a 9.4% year-to-date deficit, and there could be more downside ahead if the bullish brokerage holdouts capitulate to this plunge. KSS currently tallies 11 "strong buys," six lukewarm "holds," and not a single "sell" suggestion. Moreover, the average 12-month price target of $57.64 represents a 28% premium to Thursday's closing price of $45.02.

permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.