Analyst Downgrades: JCPenney, CBS, and Marvell

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

Nov 17, 2014 at 9:31 AM
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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.

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