Analyst Downgrades: GM, Priceline, The Coca-Cola Co

Analysts downwardly revised their ratings on GM, PCLN, and KO

Dec 16, 2014 at 9:24 AM
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Analysts are weighing in today on automaker General Motors Company (NYSE:GM), online travel issue Priceline Group Inc (NASDAQ:PCLN), and beverage stalwart The Coca-Cola Co (NYSE:KO). Here's a quick roundup of today's bearish brokerage notes on GM, PCLN, and KO.

  • One day after GM announced a fresh round of faulty ignition claims, RBC downgraded the stock to "sector perform" from "outperform," and cut its price target to $35 from $41. Against this backdrop, the stock is pointed lower ahead of the bell -- and on pace to extend its 24.2% year-to-date decline. What's more, the door is wide open for other brokerage firms to follow in RBC's footsteps. Currently, 58% of analysts covering General Motors Company maintain a "buy" or better rating, while the average 12-month price target of $40.38 stands at a 30% premium to last night's close at $31 -- and in territory not charted since January.

  • Goldman Sachs removed PCLN from its coveted "Conviction Buy" list, citing forex concerns. The brokerage firm did, however, maintain a "buy" rating on the equity. On the charts, Priceline Group Inc is down 7.2% year-to-date, and following several recent rejections from its 320-day moving average, was last seen trading at $1,078.64. Option traders have kept the faith, though, as evidenced by PCLN's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.16, which ranks in the 93rd annual percentile. Simply stated, calls have been bought to open over puts at a faster clip just 7% of the time within the past year.

  • KO was hit with a trio of price-target cuts, after the company reiterated a lackluster full-year profit forecast -- and a notable shareholder called for a changing of the guard. The most pessimistic outlook came from Jefferies, which reduced its target by $2 to $40 -- and underscored its "hold" rating -- roughly in line with last night's closing price of $40.57. It's been a tough month for The Coca-Cola Co, which is off 9.5%. Amid this decline, the stock has seen a shift in sentiment among option traders. At the ISE, CBOE, and PHLX, the stock's 10-day put/call volume ratio of 1.49 ranks just 8 percentage points from an annual bearish peak. Additionally, KO's Schaeffer's put/call open interest ratio (SOIR) of 1.11 rests higher than 91% of similar readings taken in the past year, meaning short-term speculators are more put-skewed than usual toward the stock.
 

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