Analyst Downgrades: Xoom, Alcoa, Cliffs Natural Resources

Analysts downwardly revised their ratings on Xoom Corp (NASDAQ:XOOM), Alcoa Inc (NYSE:AA), and Cliffs Natural Resources Inc (NYSE:CLF)

Jul 2, 2015 at 9:25 AM
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Analysts are weighing in today on money transfer issue Xoom Corp (NASDAQ:XOOM), as well as commodities concerns Alcoa Inc (NYSE:AA) and Cliffs Natural Resources Inc (NYSE:CLF). Here's a quick roundup of today's bearish brokerage notes on XOOM, AA, and CLF.

  • XOOM is surging ahead of the bell, after being acquired by PayPal -- itself owned by eBay Inc (NASDAQ:EBAY) -- for $890 million in cash, or $25 per share. The purchase price represents a premium of nearly 21% to last night's close at $20.70, and has Xoom Corp up by an equivalent margin. On the Street, Baird downgraded XOOM to "neutral" from "outperform," but -- along with Stifel -- upped its price target to $25. Meanwhile, short sellers may be feeling the heat this morning. A lofty 15.8% of the equity's float is sold short, which represents more than 11 sessions' worth of pent-up buying power, at typical volumes.

  • Deutsche Bank weighed in on a number of metal producers, including AA -- lowering its price target by $3 to $16. The downward revision is hardly surprising (or unprecedented), considering the stock has lost 30% year-to-date to trade at $11.07, and just yesterday touched an annual low of $10.94. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 6.70 Alcoa Inc calls for every put over the past 10 sessions -- a ratio that ranks in the bullishly skewed 87th percentile of its 52-week range. Looking ahead, AA will unofficially kick off second-quarter earnings season next Wednesday night.

  • CLF also got hit with a price-target cut from Deutsche Bank, which trimmed its forecast to $5 from $5.50. Yesterday, the stock settled at $4.21, down more than 73% year-over-year, and close to a decade-plus low of $4.12, touched in mid-March. This morning, however, the shares are up 1.2% in electronic trading. Short sellers have been flocking to Cliffs Natural Resources Inc amid its long-term downtrend. Nearly half of the equity's float is sold short, representing nine days of trading, at typical volumes.

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