Analyst Downgrades: Bank of America, Groupon, Zulily

Analysts downwardly revised their ratings on Bank of America Corp (NYSE:BAC), Groupon Inc (NASDAQ:GRPN), and Zulily Inc (NASDAQ:ZU)

May 6, 2015 at 9:30 AM
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Analysts are weighing in today on financial firm Bank of America Corp (NYSE:BAC), online coupon distributor Groupon Inc (NASDAQ:GRPN), and e-commerce specialist Zulily Inc (NASDAQ:ZU). Here's a quick roundup of today's bearish brokerage notes on BAC, GRPN, and ZU. 

  • BMO cut its rating on BAC to "market perform" from "outperform," although the shares are 0.3% higher in electronic trading. Technically speaking, the shares of Bank of America Corp have been in recovery mode, up 7.1% from their late-March lows to settle yesterday at $16.35 -- a second straight finish atop their 200-day moving average. Options traders have favored calls over puts, as BAC's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.76 is higher than 88% of all similar readings from the past year. Meanwhile, the brokerage bunch is mostly optimistic on the stock, as 56% of covering analysts rate it a "strong buy," versus only 6% who give it a "strong sell." 
  • The shares of GRPN are 1.3% lower ahead of the bell, after the firm offered a lackluster full-year revenue forecast. In response, Evercore ISI lowered its price target on the equity to $7.50 from $8 while keeping its "hold" rating, and Ascendiant Capital cut its target to $9 from $10, but underscored its "buy" opinion. On the charts, Groupon Inc has been trending downwards, with the shares down 17.2% year-to-date to close Tuesday at $6.84. What's more, the shares are currently trading beneath their 20-day moving average, which has served as resistance since early March. However, options traders have kept the faith, as GRPN's 50-day ISE/CBOE/PHLX call/put volume ratio of 4.80 stands in the 65th percentile of its annual range. Elsewhere, short interest declined by 12.4% during the last two reporting periods, but still accounts for 12.8% of GRPN's available float. It would take these bettors over eight sessions to cover their positions, at average trading volumes.  
  • ZU also issued an unimpressive full-year forecast, sending the shares tumbling 17.5% -- and toward new lows -- ahead of the bell. In addition, the firm announced that Brian Swartz will take over as CFO on June 1. Reacting were no fewer than five brokerage firms, which all lowered their price targets and/or ratings on Zulily Inc. For example, Stifel downgraded its rating to "hold" from "buy," the largest price-target cut came from Canaccord Genuity (to $10), and RBC and Baird lowered their targets to $12. Looking back, ZU has been sliding, with the shares down nearly 50% year-to-date to close yesterday at $11.82. Sentiment in the options pits has been bullish, though, as ZU's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.74 is higher than 78% of all similar readings from the past year. Meanwhile, seven out of 11 covering analysts rate the stock a "hold," with the remaining four doling out "strong buy" opinions. 

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