Schaeffer's Trading Floor Blog

Analyst Downgrades: Yum! Brands, Arch Coal, and Viacom

Analysts downwardly revised their ratings on YUM, ACI, and VIAB

by 2/6/2013 9:38 AM
Stocks quoted in this article:

Analysts are weighing in today on quick-service restaurateur Yum! Brands, Inc. (NYSE:YUM - 62.08), coal producer Arch Coal Inc (NYSE:ACI - 6.04), and entertainment company Viacom, Inc. (NASDAQ:VIAB). Here's a quick roundup of today's bearish brokerage notes.

  • Two days after revealing a weak full-year earnings outlook, YUM saw its price target cut to $62 from $65 at Susquehanna this morning, while RBC issued a downward price-target adjustment to $69 from $77. The stock has shed 6.5% so far this year, yet the sentiment scales among the brokerage bunch remain bullishly tipped. YUM currently boasts 10 "strong buys" and three "buy" endorsements, compared to nine "holds," and one "strong sell" suggestion.

  • Down more than 17% in 2013, ACI was flooded with bearish attention today, after reporting a wider-than-expected quarterly loss Tuesday morning. Specifically, J.P. Morgan Securities lowered the stock to "neutral" from "overweight," and slashed its price target to $7 from $10. Meanwhile, Dahlman Rose, FBR, and Nomura cut their respective price targets. This pessimism is prevalent in the options pits, as well. In fact, ACI's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.95 is just 9 percentage points shy of a yearly peak, meaning indicating traders have been snapping up puts at a near annual-high pace.

  • Although VIAB has advanced 12.5% year-to-date -- and bested the broader S&P 500 Index (SPX) by roughly 13 percentage points over the past 60 days -- the security was downgraded to "hold" from "buy" at Argus ahead of the opening bell. Meanwhile, bearish speculation on the stock has been on the rise lately. In fact, short interest on VIAB jumped by more than 43% during the most recent reporting period. Even so, these shorted shares account for less than 1% of the equity's available float. In other words, the stock's bearish camp is far from crowded.

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