Analyst Downgrades: Merck & Co, Kinder Morgan, Coty

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

Jun 17, 2015 at 9:26 AM
facebook twitter linkedin


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.
 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners