Analyst Update: Chesapeake Energy, Potash, Williams-Sonoma

Analysts are weighing in today on natural gas firm Chesapeake Energy Corporation (NYSE:CHK), fertilizer producer Potash Corp./Saskatchewan (USA) (NYSE:POT), and home furnishings retailer Williams-Sonoma, Inc. (NYSE:WSM). Here's a quick look at today's brokerage notes on CHK, POT, and WSM.

• CHK is down nearly 5% to hit a two-year low of $13.40 after Sterne Agee downgraded the stock to "underperform" from "neutral," citing a bleak outlook on near-term drilling and concerns over capital allocation. Like many of its sector peers, Chesapeake Energy Corporation has struggled recently, with the shares down 31.5% year-to-date. A majority of covering analysts are pessimistic on the equity, with 78% doling out "hold" or worse recommendations. However, CHK's consensus 12-month price target of $19.94 stands at a 47.4% premium to current trading levels, leaving the stock vulnerable to potential price-target reductions.


• Canaccord Genuity cut its price target on POT by $1 to 36 -- and then lowered it by another $1 to $35 -- following news that the Canadian province of Saskatchewan announced tax changes for potash producers, and after rival Belarus inked a supply contract with China. What's more, the brokerage firm reiterated its "hold" opinion of the security. Today, the shares are down 4.5% to reach $32.20 -- within a point of annual-low territory, and translating into a 8.9% year-to-date drop. Sentiment in the options pits is nearing a pessimistic peak, as Potash Corp./Saskatchewan's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.86 ranks higher than 98% of all equivalent readings taken over the past year.


• Last night, WSM reported lackluster fourth-quarter revenue and offered weak current-quarter guidance. In response, no fewer than six brokerage firms revised their recommendations on the stock. Drilling down, the largest revisions came from Barrington and Morgan Stanley, with the former hiking its price target to $85 from $80 while reiterating an "outperform" opinion, and the latter raising its price target to $84 from $80 while underscoring an "equal weight" rating. However, BB&T downgraded WSM to "hold" from "buy." Until today's 2.3% dip, Williams-Sonoma, Inc. was trending upwards, with the shares advancing 19.5% year-over-year to reach $79.13. In fact, WSM touched a record high of $84.75 on Tuesday. The brokerage bunch is lukewarm on the equity, as two-thirds of covering analysts have doled out "hold" ratings. Additionally, WSM's consensus 12-month price target of $79.73 stands within a stone's throw of current trading levels.