Analyst Downgrades: Alcoa Inc., PulteGroup, Inc., and Zumiez Inc.

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

by Josh Selway

Published on Apr 9, 2015 at 9:26 AM
Updated on Apr 20, 2015 at 5:32 PM

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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