Analyst Downgrades: Coca-Cola, SanDisk, Schlumberger

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

Dec 18, 2014 at 9:22 AM
facebook twitter linkedin


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.
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners