Analyst Downgrades: First Solar, Inc., Freeport-McMoRan Inc, and Barrick Gold Corporation (USA)

Analysts issued bearish brokerage notes on FSLR, FCX, and ABX

by Karee Venema

Published on Nov 7, 2014 at 9:22 AM
Updated on Apr 20, 2015 at 5:32 PM

Analysts are downwardly revising their ratings on alternative energy issue First Solar, Inc. (NASDAQ:FSLR), as well as commodity concerns Freeport-McMoRan Inc (NYSE:FCX) and Barrick Gold Corporation (USA) (NYSE:ABX). Here's a quick look at today's bearish brokerage notes on FSLR, FCX, and ABX.

  • FSLR is bracing for a more than 6% drop right out of the gate, after the firm's third-quarter earnings miss and news it will not spin off its solar assets was met with price-target cuts from RBC (to $50), Goldman Sachs (to $44), J.P. Morgan Securities (to $68), and Needham (to $70). Today's projected price move is likely music to the ears of option traders, who were growing increasingly bearish in the weeks leading up to last night's report. In fact, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.01 ranks higher than all other readings taken in the past year. Additionally, FSLR's Schaeffer's put/call open interest ratio (SOIR) of 0.96 ranks in the 90th percentile of its annual range, pointing to a distinct put-bias among short-term speculators. On Thursday, shares of First Solar, Inc. closed at $56.41.

  • Deutsche Bank cut its price target on FCX to $40 from $45 -- while underscoring its "buy" rating -- although this new forecast still represents expected upside of 45% to last night's close at $27.57, and sits in territory not charted in two years. Year-to-date, the stock has lost more than a quarter of its value -- and tagged a new annual low of $27.07 yesterday -- and should the shares continue to struggle, an additional round of bearish brokerage notes could be on the horizon. At present, 12 out of 15 analysts covering Freeport-McMoRan Inc deem it worthy of a "buy" or "strong buy" recommendation, with not a single "sell" to be found. Additionally, the consensus 12-month price target of $39 stands at a 41.5% premium to current trading levels.

  • ABX has been falling in step with gold, with the shares down more than 41% from their mid-August high of $19.36 to trade at $11.34. Against this backdrop, RBC slashed its price target on the shares by $4 to $17, while Goldman Sachs removed the equity from its coveted "Conviction Buy" list. On the sentiment front, option traders have taken the skeptical route in recent weeks, as evidenced by ABX's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.41, which ranks in the 79th percentile of its annual range. Outside of the options pits, though, there's plenty of room on Barrick Gold Corporation's (USA) bearish bandwagon. Short interest, for example, accounts for just 1.2% of the stock's available float, and would take less than one session to cover, at average daily trading levels.

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