Analyst Downgrades: Tesla Motors, Inc., Freeport-McMoRan Inc., and Colgate-Palmolive Company

Analysts downwardly revised their ratings on Tesla Motors Inc (TSLA), Freeport-McMoRan Inc (FCX), and Colgate-Palmolive Company (CL)

by Karee Venema

Published on Jan 21, 2015 at 9:22 AM
Updated on Apr 20, 2015 at 5:32 PM

Analysts are weighing in today on electric car concern Tesla Motors Inc (NASDAQ:TSLA), mining magnate Freeport-McMoRan Inc (NYSE:FCX), and consumer products specialist Colgate-Palmolive Company (NYSE:CL). Here's a quick roundup of today's bearish brokerage notes on TSLA, FCX, and CL.

  • It's been a rough ride for TSLA in recent months, with the shares off 34% since hitting a record peak of $291.42 in early September. The stock is poised to extend these losses today, after Morgan Stanley cut its price target to $280 from $290 amid concerns that plunging oil prices and a strengthening dollar could impact TSLA's long-term earnings outlook. The brokerage firm did reiterate its "overweight" rating, echoing the majority of analysts covering the shares. In fact, the equity has eight "buy" or better ratings, compared to five "hold" or worse suggestions. Meanwhile, TSLA's average 12-month price target of $273.21 stands at a 42.3% premium to last night's close at $191.93. Should Tesla Motors Inc's struggles continue, another round of bearish brokerage notes could be on the horizon.

  • Brean Capital lowered its price target on FCX to $29 from $37 -- and underscored its "buy" rating -- although this new forecast still represents expected upside of 50% to last night's close at $19.27. As a result, the shares are lower in electronic trading, and on pace to deepen their 45.3% year-over-year decline. In the options pits, speculators have taken note of FCX's downward spiral, but most analysts remain enamored with the stock. Specifically, 75% of those covering FCX have doled out a "buy" or better recommendation, with not a single "sell" to be found. Plus, Freeport-McMoRan Inc's consensus 12-month price target of $31.60 rests in territory not charted since late October. In other words, the door is wide open for downgrades and/or more price-target cuts, especially if the company reports lackluster earnings next Tuesday.

  • CL received a downgrade to "neutral" from "buy" at UBS overnight, sending the shares lower ahead of the bell. Since notching an all-time high of $71.31 on Dec. 24, the equity has pulled back to its 60-day moving average -- currently located at $68.50 -- and closed last night just north of this mark at $68.60. On the sentiment front, near-term traders have shown a preference for calls over puts, per CL's Schaeffer's put/call open interest ratio (SOIR) of 0.59, which ranks in the 24th percentile of its annual range. Meanwhile, with CL slated to step into the earnings confessional before next Thursday's open, premium on the stock's front-month options is relatively expensive at the moment. Specifically, Colgate-Palmolive Company's Schaeffer's Volatility Index (SVI) of 17% sits higher than 65% of similar readings taken in the past year.

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