Analyst Downgrades: JCPenney, CBS, and Marvell

Analysts downwardly revised their ratings on JCP, CBS, and MRVL

Nov 17, 2014 at 9:31 AM
facebook twitter linkedin

Analysts are weighing in today on retailer J C Penney Company Inc (NYSE:JCP), broadcasting giant CBS Corporation (NYSE:CBS), and semiconductor concern Marvell Technology Group Ltd. (NASDAQ:MRVL). Here's a quick roundup of today's bearish brokerage notes on JCP, CBS, and MRVL.

  • JCP surrendered 5.6% last week to finish at $7.38, after the company's third-quarter earnings report was met with a bearish brokerage note at Morgan Stanley. The stock is adding to these losses today, after Goldman Sachs cut its price target to $5.50 from $6.00. This skepticism toward a stock that's shed 19.3% year-to-date is shared elsewhere on the Street. In the options pits, for example, JCP's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.00 ranks in the bearishly skewed 80th annual percentile. Additionally, 34.2% of J C Penney Company Inc's float is sold short, and would take nearly eight sessions to cover, at average daily trading levels.

  • Evercore ISI followed in the footsteps of Bernstein, and reduced its price target on CBS to $63 from $65 -- citing lower revenue from political ads, and a drop-off in "profitable entertainment programming." However, this new target price still represents expected upside of roughly 18% to Friday's closing price of $53.41. Year-to-date, CBS Corporation is down 16.2%, yet option traders have kept the faith. At the ISE, CBOE, and PHLX, the equity's 10-day call/put volume ratio of 6.03 ranks higher than 72% of similar readings taken in the past year. Echoing this call-skewed trend is CBS' Schaeffer's put/call open interest ratio (SOIR) of 0.30, which ranks just 4 percentage points from a 52-week low. In other words, short-term speculators have rarely been as call-biased toward CBS as they are now. An unwinding of these bullish bets in the face of CBS' technical struggles could translate into a fresh wave of selling pressure.

  • J.P. Morgan Securities trimmed its price target on MRVL to $19 from $20 (but maintained an "overweight" opinion). Technically speaking, Marvell Technology Group Ltd. has shed 8.6% in 2014, with recent rebound attempts rejected at its 20-week moving average. Additional price-target cuts could be in store, too, if MRLV extends its retreat or reports disappointing earnings after the close on Thursday. The average 12-month price target on the equity sits at $16.24, representing expected upside of 23.6% to the stock's current perch at $13.14. Likewise, nine out of 20 analysts maintain "buy" or better opinions, leaving the door wide open for potential downgrades to exacerbate selling pressure on the shares.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners