Analyst Update: Cliffs Natural, BlackBerry, Hewlett-Packard

Analysts offered their two cents on CLF, BBRY, and HPQ

by Andrea Kramer

Published on Dec 17, 2014 at 11:36 AM
Updated on Jun 29, 2020 at 2:53 PM

U.S. stocks are higher in early trading, as crude oil extends its rebound and speculators await an announcement on diplomatic relations with Cuba and this afternoon's Federal Open Market Committee (FOMC) policy statement. Among equities attracting the attention of analysts are commodities concern Cliffs Natural Resources Inc (NYSE:CLF), mobile phone maker BlackBerry Ltd (NASDAQ:BBRY), and tech titan Hewlett-Packard Company (NYSE:HPQ).

  • CLF has plummeted 10.4% to $6.09, and earlier touched a 10-year low of $5.63, yet Credit Suisse expects the stock to steepen its slide by quite a bit. The brokerage firm today slashed its price target on Cliffs Natural Resources Inc to $1 from $10, and reiterated an "underperform" opinion, saying the company's "balance sheet handicap is simply too great." In 2014, CLF has now surrendered more than three-quarters of its value, so it's no surprise to find most analysts already in the bears' corner. Just one offers up a "strong buy" opinion, compared to seven "holds" and four "sell" or worse ratings. There could be more price-target cuts on the way, though, as the average 12-month price target of $8.18 represents a premium of 34.3% to CLF's current perch. Elsewhere, short sellers are likely cheering the equity's retreat, as more than half of the stock's float is dedicated to short interest.

  • BBRY is flirting with a 1.9% gain at $9.69, as traders applaud the company's highly anticipated Classic device launch and an upbeat analyst note. Specifically, BGC Financial upgraded BlackBerry Ltd to "buy" from "hold," and lifted its price target to $12.50 from $11. The shares have muscled 30.4% higher year-to-date, yet analysts remain unconvinced. Just one out of 19 brokerage firms deems BBRY worthy of a "buy" or better rating, meaning more upgrades could be coming down the pike. Furthermore, short interest makes up 23.2% of BBRY's total available float, representing more than nine sessions' worth of pent-up buying demand, at the stock's average pace of trading. As the shares extend their upward momentum, a short-squeeze situation could add fuel to the fire.

  • Finally, HPQ has added 2.6% to trade at $38.29, after Morgan Stanley upped its view of the IT hardware industry to "in line" from "cautious." The brokerage firm also hiked its price target on HPQ by $4 to $44 -- representing a new three-year high -- and underscored an "overweight" assessment. Hewlett-Packard Company has soared roughly 37% in 2014, led higher atop its 10-week and 40-week moving averages. Nevertheless, option traders have purchased HPQ puts over calls at a near-annual-high clip during the past two weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), as the stock's 10-day put/call volume ratio of 1.16 stands higher than 97% of all other readings from the past year. Considering HPQ's long-term ascent, though, some of those puts may have been purchased by shareholders looking to lock in profits.

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