Analyst Downgrades: Tesla, US Steel, and Verizon

Analysts downwardly revised their ratings on TSLA, X, and VZ

Karee Venema
Dec 17, 2014 at 9:22 AM
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Analysts are weighing in today on electric automaker Tesla Motors Inc (NASDAQ:TSLA), commodity concern United States Steel Corporation (NYSE:X), and telecommunications giant Verizon Communications Inc. (NYSE:VZ). Here's a quick roundup of today's bearish brokerage notes on TSLA, X, and VZ.

  • Morgan Stanley cut its price target on TSLA to $290 from $320 -- but maintained its "overweight" rating -- although this still represents expected upside of nearly 47% to last night's close at $197.81, TSLA's first finish south of $200 since May. In fact, the stock hasn't traded north of $290 on an intraday basis since Sept. 4, when it hit a record peak of $291.42, and has shed 32% during this time frame. Plus, the security notched a second consecutive close south of its 320-day moving average on Tuesday, something that hasn't happened since early November 2012. Against this backdrop, option traders have been growing increasingly pessimistic, as evidenced by Tesla Motors Inc's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.19, which ranks at an annual bearish peak.

  • X was slapped with a price-target reduction to $31 at Jefferies, which also underscored its lukewarm "hold" recommendation. This bearish brokerage note isn't too surprising, considering X has surrendered 40% since hitting a three-year high of $46.55 in mid-September. Should United States Steel Corporation continue to struggle, another round of downwardly revised analyst ratings could be on the horizon. There are currently six "strong buy" ratings levied toward the stock, versus four "holds" and three "sell" or worse suggestions. Additionally, the average 12-month price target of $43.31 stands at a 55.2% premium to Tuesday's settlement at $27.90 -- and in territory not charted since late September.

  • Bernstein weighed in on VZ this morning, lowering its price target on the shares by $3 to $54. The brokerage firm did reiterate its "outperform" rating, however, echoing the general consensus on the Street. Meanwhile, Goldman Sachs downgraded VZ to "neutral" and slashed its price target by $7 to $48. Eighteen out of 24 analysts covering the equity maintain a "buy" or better recommendation, with not a single "sell" to be found. Elsewhere, the consensus 12-month price target of $52.98 stands 16.4% higher than last night's close at $45.53, and within striking distance of the shares' July 29 annual high of $53.66. On the charts, Verizon Communications Inc. has put in an uninspiring performance in 2014, and is down 7.3%. More recently, the stock has struggled along with its sector peers, and is 10% lower on a month-to-date basis.

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