Analyst Update: Ducommun Incorporated, McKesson Corporation, and Rentrak Corporation

Analysts adjusted their ratings on Ducommun Incorporated (NYSE:DCO), McKesson Corporation (NYSE:MCK), and Rentrak Corporation (NASDAQ:RENT)

by Griffin Kruse

Published on May 13, 2015 at 1:16 PM

Analysts are weighing in today on aerospace engineering concern Ducommun Incorporated (NYSE:DCO), pharmaceutical distribution firm McKesson Corporation (NYSE:MCK), and media insight issue Rentrak Corporation (NASDAQ:RENT). Here's a quick look at today's brokerage notes on DCO, MCK, and RENT. 

  • The shares of DCO are 21.6% lower at $23.98 -- making it the top percentage loser on the Big Board, and earning it a place on the short-sale restricted (SSR) list -- after the company's surprise first-quarter loss was met with a pair of negative brokerage notes. Specifically, Canaccord Genuity cut its price target to $30 from $31 while keeping its "hold" opinion, and D.A. Davidson & Co lowered its target to $28 from $30 while reaffirming a "neutral" rating. Heading into today's session, Ducommun Incorporated had been a technical outperformer, with the shares up over 21% year-to-date. However, today's bear gap has pulled the shares 5.1% into the red for 2015. Looking to the options pits, traders were aligning bullishly ahead of earnings. Over the past 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 3.50 DCO calls were bought to open for every put. Elsewhere, short interest declined by 26.1% during the last reporting period, and now accounts for a scant 1.6% of the stock's available float.  
  • On the other hand, MCK released fiscal fourth-quarter earnings that toppled analysts' expectations, sending the shares 2% higher to $234.09. In fact, the stock touched a record peak of $236 in intraday action. In response, no fewer than nine brokerage firms raised their price targets on the security, including Raymond James (to $265), J.P. Morgan Securities (to $255), and Credit Suisse (to $263). Additionally, all nine brokerage firms reiterated "outperform" or equivalent ratings. Technically speaking, McKesson Corporation has been a beast, with the shares up over 31% year-over-year. Despite this uptrend, options traders have been betting bearishly on the stock, as MCK's 50-day ISE/CBOE/PHLX put/call volume ratio of 2.43 stands higher than 97% of all similar readings from the past year. Mirroring this indicator is the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.77, which ranks in the 96th annual percentile. Said another way, short-term speculators have only been more put-skewed 4% of the time over the last 12 months. 
  • Wunderlich upgraded RENT to "buy" from "hold" -- and lifted its price target to $65 from $60 -- after the company reported better-than-expected fiscal fourth-quarter revenue. On the charts, Rentrak Corporation has jumped 23.3% to $63, making it one of the top percentage gainers on the Nasdaq. Furthermore, today's pop has the shares above their 200-day moving average for the first time since a post-earnings bear gap in early February. Traders had been picking up calls at a rapid-fire clip ahead of yesterday's earnings release, as 29.5 RENT calls have been bought to open for every put over the last 10 days at the ISE, CBOE, and PHLX. Meanwhile, short interest declined by 5% during the last reporting period, but still accounts for 15% of RENT's available float. It would take these bettors 11 sessions to cover their positions, at average trading volumes.

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