Analyst Downgrades: Alcoa, PulteGroup, Zumiez

Analysts downwardly revised their ratings on Alcoa Inc (AA), PulteGroup, Inc. (PHM), and Zumiez Inc. (ZUMZ)

Josh Selway

Apr 9, 2015 at 9:26 AM

AA
PHM
ZUMZ

Analysts are weighing in today on aluminum manufacturer Alcoa Inc (NYSE:AA), homebuilder PulteGroup, Inc. (NYSE:PHM), and sports apparel retailer Zumiez Inc. (NASDAQ:ZUMZ). Here's a quick roundup of today's bearish brokerage notes on AA, PHM, and ZUMZ.

Although AA reported first-quarter earnings that topped expectations, revenue figures came up short. As a result, the equity is facing a 2.4% drop out of the gate. Also weighing on the shares is a price-target reduction at Stifel, to $19 from $20 -- though the firm maintained its "buy" rating. Alcoa Inc has lost 23% since hitting a multi-year high of $17.75 in late November, closing yesterday at $13.67. Analysts' ratings are practically split down the middle. Eight brokerage firms rate AA a "buy" or better, with seven calling the security a "hold" or worse.

PHM is in similar shape, dropping 2.3% in electronic trading after J.P. Morgan Securities cut the stock to "underweight" from "neutral." This analyst note is clearly outweighing a 50-cent price-target increase at Credit Suisse to $19.50. The stock closed at $22.47 yesterday, as the shares have slightly outperformed the S&P 500 Index (SPX) over the past month. In the options pits, though, put buying has been popular. PulteGroup, Inc.'s 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 2.32 is only 4 percentage points from an annual bearish extreme.

ZUMZ was downgraded at BB&T to "hold," and saw its price target cut to $42 from $45 at Roth Capital, following a weaker-than-projected rise in March same-store sales. The security settled at $37.90 yesterday, and has mostly been churning between $37 and $40 in 2015. Looking to the options pits, short-term call open interest holds a strong lead over put open interest. Zumiez Inc.'s Schaeffer's put/call open interest ratio (SOIR) stands at 0.29 and ranks in the 13th annual percentile. These figures reveal ZUMZ's short-term options players are more call-focused than normal.

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