Analyst Downgrades: Merck & Co., Inc., Kinder Morgan, Inc., and Coty Inc.

Analysts downwardly revised their ratings and price targets on Merck & Co., Inc. (NYSE:MRK), Kinder Morgan Inc (NYSE:KMI), and Coty Inc (NYSE:COTY)

by Josh Selway

Published on Jun 17, 2015 at 9:26 AM

Analysts are weighing in today on health care giant Merck & Co., Inc. (NYSE:MRK), energy infrastructure firm Kinder Morgan Inc (NYSE:KMI), and cosmetics marketer Coty Inc (NYSE:COTY). Here's a quick roundup of today's bearish brokerage notes on MRK, KMI, and COTY.

  • With half of covering analysts issuing "hold" ratings on the stock, MRK is no stranger to bearish attention. This morning, Piper Jaffray decided to join the skeptical bunch, initiating coverage with an "underweight" assessment. The shares are only 1.6% higher in 2015 -- last seen at $57.71 -- but could see support from their 80-week moving average, a trendline that's helped them since late 2013. Option traders certainly expect big things from Merck & Co., Inc. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 3.77 ranks higher than 86% of readings from the past year.

  • KMI has been charting a path lower since its all-time high of $44.71 on April 24, dropping 11.7% to hit $39.49. However, the stock is actually gaining in electronic trading -- up 0.8% -- despite a price-target cut at Jefferies to $43. Even though 88% of analysts consider Kinder Morgan Inc a "buy" or better, option traders appear uncertain. The security's Schaeffer's put/call open interest ratio (SOIR) stands at 0.86, which only 2 percentage points away from an annual put-skewed extreme.

  • COTY has dropped 1.5% in pre-market action, after Citigroup lowered its outlook to "neutral." This is somewhat surprising, since the shares have topped the S&P 500 Index (SPX) by 27.8 percentage points in the past three months. Yesterday, in fact, the stock gapped higher on a trio of acquisitions to touch an all-time high of $31.29, before settling at $31.08. In Coty Inc's option pits, traders are betting on more upside. During the past two weeks, almost 1,600 calls have been bought to open at the ISE, CBOE, and PHLX, versus just 108 puts.

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