Analyst Downgrades: Cliffs, JCPenney, and TASER

Analysts downwardly revised their ratings on CLF, JCP, and TASR

Dec 3, 2014 at 10:09 AM
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Analysts are weighing in today on mining firm Cliffs Natural Resources Inc (NYSE:CLF), retailer J C Penney Company Inc (NYSE:JCP), and security equipment issue TASER International, Inc. (NASDAQ:TASR). Here's a quick roundup of today's bearish brokerage notes on CLF, JCP, and TASR.

  • Following news that CLF will sell its West Virginia coal assets, Cowen and Company trimmed its price target on the shares to $10 from $12, and restated its "market perform" rating. Despite popping more than 5% out of the gate, the stock has struggled longer term, down roughly 67% year-to-date to trade at $8.59. Not surprisingly, nearly 46% of Cliffs Natural Resources Inc's float is sold short, which represents approximately nine sessions' worth of pent-up buying demand, at the average daily rate of trading.

  • JCP is down 5.5% this morning, after Goldman Sachs downgraded the stock to "sell" from "neutral." This only adds to the technical pain the retailer has experienced this year. In fact, J C Penney Company Inc has shed 23.6% of its value in 2014 to rest at $6.99. Taking a step back, bearish attention is nothing new for the equity. Fourteen out of 16 covering analysts have doled out "hold" or worse recommendations on JCP. What's more, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.97 ranks in the 90th percentile of its annual range -- suggesting a healthier-than-usual appetite for long puts over calls in recent months.

  • Finally, TASR has dropped 5.1% out of the gate to hover near $22.16, after J.P. Morgan Securities slashed its rating on the stock to "neutral" from "overweight." Specifically, the brokerage firm is concerned about TASER International, Inc.'s valuation, saying the "magnitude of the current multiple is too high." Longer term, however, the security has been tearing up the charts, rising more than 40% year-to-date, hitting a 10-year high yesterday, and outperforming the broader S&P 500 Index (SPX) by 51.4 percentage points during the previous two months. Nevertheless, there's plenty of skepticism to be found among short sellers, as nearly 18% of TASR's float is sold short.


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