Analyst Downgrades: Abercrombie, Suncor Energy, Vale

Analysts downwardly revised their ratings on ANF, SU, and VALE

Dec 4, 2014 at 9:34 AM
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Analysts are weighing in today on apparel retailer Abercrombie & Fitch Co. (NYSE:ANF), crude oil producer Suncor Energy Inc. (USA) (NYSE:SU), and Brazilian mining concern Vale SA (ADR) (NYSE:VALE). Here's a quick roundup of today's bearish brokerage notes on ANF, SU, and VALE.

  • ANF swung wildly following yesterday morning's third-quarter earnings report, but eventually settled 3.5% higher at $28.81. This morning, though, the stock received price-target cuts from Mizuho (to $29 from $30) and KeyBanc (to $35 from $38), which reaffirmed their respective "neutral" and "buy" ratings. Longer term, shares of Abercrombie & Fitch Co. have struggled, losing 12.5% in 2014. Not surprisingly, short sellers have descended on the retail name, with short interest rising 17.4% during the latest reporting period. In fact, nearly 30% of ANF's float is dedicated to short interest, which would take more than a week to buy back, at the security's typical daily trading volume.

  • CIBC weighed in on a number of energy stocks, including SU -- slashing the shares' price target to C$48 from C$50, while maintaining an "outperformer" rating. Raymond James followed suit, reducing the equity's price target to C$41 from C$45, and underscoring its "outperform" assessment. This negative attention isn't shocking, given Suncor Energy Inc.'s year-to-date deficit of 6.2% to trade at $32.86, as of Wednesday's close. Earlier this week, in fact, the stock hit a new annual low of $30.75, on the heels of another downbeat brokerage note. Considering SU's consensus 12-month price target is still sitting at $47.32 -- or 44% above current trading levels -- additional price-target cuts could be on the way.

  • Finally, VALE -- which has tumbled 45% this year to hover near $8.40, and hit a nine-year low of $8.32 on Tuesday following news of a possible base-metals unit spinoff -- saw its price target reduced to $10 from $12 at RBC, which underscored its "sector perform" opinion. Likewise, BofA-Merrill Lynch slashed its rating on the stock to "neutral" from "buy." The brokerage bunch isn't the only corner of Wall Street that's bearish on Vale SA (ADR). In fact, during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a put/call volume ratio of 0.88, which registers in the 87th percentile of its annual range.


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