Analyst Downgrades: Caterpillar Inc., Johnson & Johnson, and Transocean LTD

Analysts downwardly revised their ratings on CAT, JNJ, and RIG

by Alex Eppstein

Published on Oct 15, 2014 at 9:17 AM
Updated on Apr 20, 2015 at 5:10 PM

Analysts are weighing in today on Dow components Caterpillar Inc. (NYSE:CAT) and Johnson & Johnson (NYSE:JNJ), as well as offshore driller Transocean LTD (NYSE:RIG). Here's a quick roundup of today's bearish brokerage notes on CAT, JNJ, and RIG.

  • CAT saw its price target slashed to $108 from $119 at Credit Suisse, which nevertheless maintained its "outperform" rating. It's been a ho-hum year for the shares, which have advanced just 2.2% to trade at $92.80, and have been in a steady downtrend since the start of September. Not surprisingly, 11 out of 17 covering analysts have doled out "hold" opinions on Caterpillar Inc., compared to six total "buy" endorsements. Looking ahead, the company will report third-quarter earnings next Thursday morning.

  • JNJ -- which paced the Dow's losers on Tuesday despite stronger-than-expected quarterly earnings -- was barraged by bearish brokerage notes this morning. Specifically, Cowen and Company lowered its target price to $114 from $117, Raymond James reduced its target to $107 from $113, Goldman Sachs cuts its expectations to $97 from $105, and Piper Jaffray trimmed its benchmark to $107 from $110. However, while the former two reiterated "outperform" ratings, the latter two underscored "neutral" opinions. On the charts, Johnson & Johnson is up a respectable 5.9% year-to-date to rest at $97.01. Nevertheless, the stock's 50-day put/call volume ratio of 0.88 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks just 1 percentage points from an annual bearish acme.

  • Finally, RIG got hit with a pair of negative analyst notes earlier. Specifically, Deutsche Bank slashed its price target to $16 from $27, while ISI Group initiated coverage on the shares with a "sell" rating and $27 price target -- lower than the current price of $28.97. It's no wonder the Street is bearish toward Transocean LTD; the stock has plunged 41.4% in 2014. Short sellers have been swarming RIG, too, as almost one-quarter of the security's float is sold short, which would take 7.7 sessions to buy back, given average daily trading levels.

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