Analyst Downgrades: Urban Outfitters, Inc., Canadian Solar Inc., and Freeport-McMoRan Inc

Analysts downwardly revised their ratings on URBN, CSIQ, and FCX

by Karee Venema

Published on Nov 18, 2014 at 9:36 AM
Updated on Apr 20, 2015 at 5:32 PM

Analysts are weighing in on retailer Urban Outfitters, Inc. (NASDAQ:URBN), alternative energy concern Canadian Solar Inc. (NASDAQ:CSIQ), and mining magnate Freeport-McMoRan Inc (NYSE:FCX). Here's a quick roundup of today's bearish brokerage notes on URBN, CSIQ, and FCX.

  • To the disappointment of yesterday's option bulls, URBN plunged 6% % out of the gate -- and to a new two-year low of $28.54 -- after a steep drop in the company's third-quarter profit was met with no fewer than eight price-target cuts, as well as a downgrade to "market perform" from "outperform" at William Blair. It's already been a tough year for the shares, which were down 16.9% heading into today's trading, and should this downward trajectory continue, another round of bearish brokerage notes could be on the horizon. Nearly 58% of analysts currently covering the shares maintain a "buy" or "strong buy" rating, with not a single "sell" to be found. Plus, the consensus 12-month price target of $36.45 stands at an 18.2% premium to last night's close at $30.83.

  • J.P. Morgan Securities cut its price target on CSIQ to $36 from $38, while underscoring its "overweight" rating. This skepticism runs counter to the sentiment seen in the options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, CSIQ's 50-day call/put volume ratio of 3.73 ranks just 7 percentage points from an annual bullish peak. Echoing this trend toward calls is CSIQ's Schaeffer's put/call open interest ratio (SOIR) of 0.41, which sits lower than 99% of similar readings taken in the past year. Simply stated, short-term speculators have rarely been as call-skewed toward Canadian Solar Inc. as they are now. In today's session, CSIQ is up 1.9% to trade at $26.86 following reports of a freshly inked solar project in Georgia.

  • BMO initiated coverage on a number of mining firms, and for FCX, this resulted in a lukewarm "market perform" rating. On the charts, Freeport-McMoRan Inc has shed roughly one-quarter of its value this year to churn near $28.52 -- yet sentiment around the Street is tilted toward the bullish side. In the options pits, the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.20 ranks higher than 90% of similar readings taken in the past year. Elsewhere, 12 out of 15 analysts covering the shares maintain a "buy" or better rating, versus three tepid "hold" recommendations. Additionally, the average 12-month price target of $38.60 represents expected upside of 35% to current trading levels.

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