Analyst Downgrades: Deckers, Potash, and Transocean

Analysts downwardly revised their ratings on Deckers Outdoor Corp (NYSE:DECK), Potash Corp./Saskatchewan (USA) (NYSE:POT), and Transocean LTD (NYSE:RIG)

May 29, 2015 at 9:18 AM
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Analysts are weighing in today on footwear specialist Deckers Outdoor Corp (NYSE:DECK), fertilizer fiend Potash Corp./Saskatchewan (USA) (NYSE:POT), and offshore drilling issue Transocean LTD (NYSE:RIG). Here's a quick roundup of today's bearish brokerage notes on DECK, POT, and RIG.

  • DECK was hit with a round of negative analyst notes today, following last night's poorly received fiscal fourth-quarter numbers. Specifically, Jefferies cut its price target to $105 from $110, Janney trimmed its fair value to $80 from $82, and Credit Suisse lowered its outlook to $77 from $82 -- though Susquehanna raised its price target to $86 from $83. Ahead of the bell, Deckers Outdoor Corp is off 1.7% -- business as usual for a stock that's dropped nearly 22% in 2015 to trade at $71.20. Traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) are betting on more downside ahead. DECK's 50-day put/call volume ratio of 1.43 ranks in the 80th annual percentile, meaning traders have had a strong-than-usual appetite for puts over calls. 

  • POT is signaling a lower start this morning, after TD Securities downgraded the equity to "hold" from "buy," and lowered its price target to $35 from $39. On the charts, the shares have been churning in the $32-$33.50 range for the last two months, and settled at $32.33 yesterday -- off 14% since their mid-February high at $37.60. Potash Corp./Saskatchewan could be vulnerable to additional negative analyst attention. Eight brokerage firms consider the stock a "buy" or better, compared to nine "holds" and just one "strong sell." Plus, POT's consensus 12-month price target of $45.44 stands at a more than 40% premium to Thursday's close.

  • RIG was started with an "underweight" rating and $16 price target at J.P. Morgan Securities. Now, the shares are set to start the day 0.3% lower. Technically speaking, the equity had a disastrous 2014, but has been clawing its way higher this year -- up 3.7% at $19.01, and currently sitting atop its 32-day moving average. However, the brokerage bunch remains exceedingly bearish on Transocean LTD, with all 16 analysts handing out "hold" or worse recommendations. Echoing this, 29.4% of RIG's float is sold short, equating to nearly nine sessions' worth of trading activity, at typical daily levels.

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