Analyst Downgrades: General Motors Company, Garmin Ltd., and Potash Corp./Saskatchewan

Analysts downwardly revised their ratings on General Motors Company (GM), Garmin Ltd. (GRMN), and Potash Corp./Saskatchewan (USA) (POT)

by Alex Eppstein

Published on Jul 16, 2015 at 9:52 AM

Analysts are weighing in today on automaker General Motors Company (NYSE:GM), GPS giant Garmin Ltd. (NASDAQ:GRMN), and fertilizer firm Potash Corp./Saskatchewan (USA) (NYSE:POT). Here's a quick roundup of today's bearish brokerage notes on GM, GRMN, and POT.

  • GM, which announced another round of recalls yesterday, saw its rating downgraded to "equal weight" from "overweight" -- and its price target reduced to $36 from $44 -- at Barclays. On the charts, the stock has lost 11.7% in 2015 to land at $30.84, and has underperformed the broader S&P 500 Index (SPX) by 12.5 percentage points over the past 20 sessions. Amid this downtrend, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been buying to open General Motors Company puts over calls at an increasingly accelerated clip. The equity's 10-day put/call volume ratio of 0.84 outranks 90% of comparable readings from the past year. Looking ahead, GM will report earnings one week from this morning. The last time around, the shares slid 3.3% in the session following the company's quarterly results.

  • After last night offering up disappointing preliminary second-quarter results and lowering its full-year guidance, GRMN is in the bearish crosshairs. Specifically, J.P. Morgan Securities cut its price target by $4 to $42, while Dougherty & Company slashed its price target by $10 to $50. As such, Garmin Ltd. has plunged over 10% out of the gate to trade at $41.65 -- touching an annual low of $41.20 in the process. This is music to the ears of short sellers. Over 12% of GRMN's float is sold short, which would take 9.5 sessions to repurchase, at typical daily volumes.

  • POT saw its price target trimmed to $34 from $37 at CIBC. The bearish attention is well-earned, considering the stock has lost almost 18% in 2015 to trade at $28.98, and hit a nearly two-year low of $28.58 one week ago. In spite of this long-term downtrend, traders at the ISE, CBOE, and PHLX have been buying to open calls over puts at a breakneck speed in recent months. Potash Corp./Saskatchewan's 50-day call/put volume ratio of 3.99 outstrips all but 4% of readings taken in the last 12 months. A capitulation among these bullish holdouts could result in additional headwinds.

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