Analyst Downgrades: Coca-Cola, SanDisk, Schlumberger

Analysts downwardly revised their ratings on KO, SNDK, and SLB

by Karee Venema

Published on Dec 18, 2014 at 9:22 AM
Updated on Jul 2, 2020 at 1:29 PM

Analysts are weighing in today on blue-chip beverage giant The Coca-Cola Co (NYSE:KO), data storage solutions specialist SanDisk Corporation (NASDAQ:SNDK), and oil-and-gas issue Schlumberger (NYSE:SLB). Here's a quick roundup of today's bearish brokerage notes on KO, SNDK, and SLB.

  • SocGen followed in the recent footsteps of its fellow brokerage firms, reducing its price target on KO to $38, and underscoring its "sell" rating. It's been a tough month for the shares, which have shed 7.3% since their Nov. 28 record close at $44.83 to trade at $41.55. Against this backdrop, option traders have been growing increasingly pessimistic. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.03 ranks in the 84th percentile of its annual range. Simply stated, puts have been bought to open over calls on The Coca-Cola Co at a faster-than-usual clip in recent weeks.

  • Stifel cut its price target on SNDK to $109 from $112 -- and reiterated its "buy" rating -- although this still represents expected upside of 10.4% to last night's closing price of $98.74, and rests in territory yet to be charted by the shares. Overall, analysts have been upbeat toward a stock that's rallied nearly 40% year-to-date. Of the 22 brokerage firms covering SanDisk Corporation, 19 maintain a "buy" or better rating, with not a single "sell" to be found. Plus, the consensus 12-month price target of $110.69 sits at a 12.1% premium to current trading levels.

  • SLB is poised to pop 1.3% out of the gate, as a rebound in the energy sector overshadows a price-target reduction to $89 and an uninspiring "hold" recommendation at Jefferies. Longer term, the shares have surrendered 30% since topping out at a record peak of $118.76 in early July, and closed last night at $82.88, just shy of their 10-day moving average. Not surprisingly, option traders have taken the bearish route. At the ISE, CBOE, and PHLX, for example, SLB's 10-day put/call volume ratio of 2.19 ranks 3 percentage points from an annual bearish peak. Additionally, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.17 ranks higher than 64% of similar readings taken in the past year. In other words, short-term speculators are more put-heavy than usual toward Schlumberger Limited.

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