Analyst Downgrades: JPMorgan, 3D Systems, KB Home

Analysts downwardly revised their ratings on JPMorgan Chase & Co. (JPM), 3D Systems Corporation (DDD), and KB Home (KBH)

Jan 14, 2015 at 9:35 AM
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Analysts are weighing in today on blue chip JPMorgan Chase & Co. (NYSE:JPM), 3-D printing issue 3D Systems Corporation (NYSE:DDD), and homebuilder KB Home (NYSE:KBH). Here's a quick roundup of today's bearish brokerage notes on JPM, DDD, and KBH.

  • JPM is attracting some bearish brokerage attention, following a fourth-quarter earnings miss. Specifically, HSBC downgraded the stock to "underweight" from "neutral," and cut its price target to $55.50 from $61. As such, the shares have retreated 3.4% this morning to trade at $56.83, erasing their year-over-year gains. If JPMorgan Chase & Co. doesn't bounce back quickly from this fundamental misstep, another round of negative notes could come down the pike. Currently, 85% of covering analysts boast a "buy" or better rating on JPM, while its consensus 12-month price target of $68.42 resides in uncharted territory.

  • J.P. Morgan Securities trimmed its price target on DDD to $39 from $42, and reiterated a "neutral" opinion, despite the stock's recent relative strength. Specifically, shares of the 3-D printer designer have outperformed the broader S&P 500 Index (SPX) by 7 percentage points over the last month. Also, at $30.31, 3D Systems Corporation has gained 10.4% since hitting a two-year low of $27.46 in mid-December. On the sentiment front, nearly one-third of the equity's float is sold short, which would take more than two weeks to cover, at typical daily trading volumes. If DDD can sustain its move off the lows, a short-covering rally could ensue. Out of the gate, however, the stock is 2% lower.

  • Finally, KBH -- which suffered an earnings-induced 16% drop yesterday to settle at $13.87 -- is headed south this morning. Specifically, the shares are 1.5% lower in early trading, after getting hit with a number of negative analyst notes. RBC, KBW, Buckingham, and Susquehanna each reduced their price targets on KB Home, while Susquehanna and Credit Suisse both downgraded the stock to "neutral." Longer term, the shares have dropped roughly 24% since this time last year. Nevertheless, options traders have kept the faith. The stock's 50-day call/put volume ratio of 5.66 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 87th percentile of its annual range. However, some of the call buying may have been at the hands of short sellers seeking an upside hedge; nearly 20% of KBH's float is sold short, representing about seven times the stock's average daily volume.
 

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