Schaeffer's Trading Floor Blog

Analyst Update: Brinker International, IBM, and Discover Financial Services

Analysts adjusted their positions on EAT, IBM, and DFS

by 12/21/2012 11:00 AM
Stocks quoted in this article:

Stock markets are considerably lower in late-morning action, as investors lament the recent roadblock in U.S. budget negotiations. Here's a quick update on today's latest brokerage notes, including adjustments for restaurant franchiser Brinker International, Inc. (NYSE:EAT - 31.22), information technology behemoth International Business Machines Corporation (NYSE:IBM - 193.77), and banking and payment services outfit Discover Financial Services (NYSE:DFS - 38.63).

  • Although EAT was upgraded to "buy" from "neutral" at Sterne Agee today, the stock is being pulled lower by the broad-market downturn. On the charts, EAT has run into a bit of a rough patch, as the shares' recent rally attempt has been limited by the $31.50-$32 area, as well as their 200-day moving average. This trendline has acted as a technical ceiling since late October, and is directly pressuring EAT once again. Meanwhile, the brokerage bunch maintains a skeptical view, as 10 out of 16 analysts consider the security a "hold" or worse.

  • The fiscal cliff-induced pullback seems to be weighing on IBM as well. While the equity is off nearly 0.6% so far today, it didn't come at the hands of a negative brokerage note. Earlier in the session, Topeka Capital initiated coverage on IBM with a "buy" rating. Sentiment is nearly split among other analysts following IBM, though, as 42% of the 21 ratings are of the "buy" or better variety. Elsewhere on the Street, short interest has been relatively low. Over the most recent reporting period, short interest inched 0.5% higher, and now makes up 1.4% of IBM's available float, pointing to a rather meager supply of sideline cash.

  • Following a lackluster fourth-quarter earnings report, DFS was slapped with a negative note from FBR, in which the firm lowered its rating to "market perform" from "outperform," and cut its price target by $2 to $42. Since the opening bell, however, the shares have been wavering around the breakeven mark, trying to preserve their impressive 60% year-to-date climb. Looking closer at the sentiment backdrop, the majority of covering analysts appear upbeat toward DFS, handing out 13 "buy" or better recommendations, five middling "holds," and zero "sells." What's more, the consensus 12-month price target sits at $45.71, which represents a 19% premium to Thursday's closing price of $38.41.

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