Analyst Update: Century Aluminum, Freeport-McMoRan

Analysts adjusted their ratings on Century Aluminum Co (CENX), Freeport-McMoRan Inc (FCX), and Zagg Inc (ZAGG)

by Griffin Kruse

Published on Mar 24, 2015 at 11:40 AM
Updated on Jun 29, 2020 at 2:32 PM

Analysts are weighing in today on commodity concerns Century Aluminum Co (NASDAQ:CENX) and Freeport-McMoRan Inc (NYSE:FCX), as well as mobile accessories designer Zagg Inc (NASDAQ:ZAGG). Here's a quick look at today's brokerage notes on CENX, FCX, and ZAGG.

  • Morgan Stanley downgraded CENX to "underweight" from "equal weight" and cut its price target by $6 to $12, with the brokerage firm citing "weak demand ... improving supply, [and] a strong dollar" as a few of the headwinds facing the industrial metals group. At last check, the shares of Century Aluminum Co were down 6.2% to hit $13.41, contributing to a 45% year-to-date loss. Accordingly, sentiment in the options pits has been bearish, as CENX's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 6.40 ranks in the 89th percentile of its annual range. Echoing this indicator is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.31, which is the highest such reading taken over the past year. Simply stated, traders have never been this put-skewed over the past 12 months.

  • FCX also saw a price-target cut from Morgan Stanley, with the brokerage firm lowering its target by $5 to $20 while keeping its "equal weight" rating. What's more, Freeport-McMoRan Inc announced today it is decreasing its quarterly dividend by 84%, with the firm saying, "The reduction in the dividend is a prudent measure to strengthen our balance sheet during a period of volatile market conditions." Despite yesterday's rally, FCX has been a technical underperformer, with the shares down 18.2% year-to-date to reach $19.10, including a 1.3% dip today. Options traders are betting on more downside to come, as FCX's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.05 ranks higher than 97% of all equivalent readings taken over the past year.

  • Craig-Hallum downgraded ZAGG to "hold" from "buy," sending the shares down 7.7% to hit $8.70. Zagg Inc has advanced roughly 87.5% year-over-year -- and in a note to clients, Craig-Hallum attributed the move to valuation concerns. Although the stock has been a technical juggernaut, puts have been prominent in the options pits, as ZAGG's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.43 sits in the 84th percentile of its annual range. Meanwhile, the analyst community is divided on the equity, with 40% of covering analysts doling out lukewarm "hold" ratings.

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