Analyst Downgrades: Barrick Gold Corporation (USA), HollyFrontier Corp, and Krispy Kreme Doughnuts

Analysts downwardly revised their ratings and price targets on Barrick Gold Corporation (USA) (NYSE:ABX), HollyFrontier Corp (NYSE:HFC), and Krispy Kreme Doughnuts (NYSE:KKD)

Karee Venema

Mar 23, 2016 at 9:59 AM

Analysts are weighing in on gold stock Barrick Gold Corporation (USA) (NYSE:ABX), petroleum refiner HollyFrontier Corp (NYSE:HFC), and doughnut distributor Krispy Kreme Doughnuts (NYSE:KKD). Here's a quick roundup of today's bearish brokerage notes on ABX, HFC, and KKD.

Heading into today's trading, ABX had nearly doubled in value year-to-date, and hit an annual high of $15.52 last Thursday. Nevertheless, Deutsche Bank lowered its rating to "hold" from "buy" -- while waxing optimistic on this other commodity stock -- which has sent the shares down 7.8% this morning to $13.37. Meanwhile, in the options pits, short-term speculators are more put-skewed now than they've been at any other point during the past year, per ABX's Schaeffer's put/call open interest ratio (SOIR) of 1.41 - an annual high. Should Barrick Gold Corporation resume its longer-term uptrend, an unwinding of the hedges related to these bearish bets could help propel the shares even higher.

Goldman Sachs cut its outlook for HFC to "sell" from "neutral," and cut its price target to $34 from $37, citing concerns over valuation and earnings per share. As such -- and amid falling oil prices -- the shares are down 4.4% to $36.69. Longer term, HollyFrontier Corp has added nearly 27% since hitting a three-year low of $29 in mid-February. Short sellers, however, have been ramping up their bearish exposure. Short interest surged 10.7% in the most recent reporting period to 10.10 million shares -- the loftiest amount since early September.

KKD has shed 7.4% out of the gate to trade at $14.25, after the company's fourth-quarter revenue miss and lackluster guidance was met with a price-target cut to $21 from $22 at Wedbush. Today's negative price action only echoes the equity's technical troubles, with shares of KKD off more than 31% year-over-year. Options traders, however, have been scooping up long calls at a rapid-fire rate ahead of earnings, as evidenced by KKD's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.38 -- in the 79th annual percentile. Krispy Kreme Doughnuts could encounter a fresh wave of selling pressure, should these option bulls jump ship.

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