Analyst Downgrades: Zillow, Yelp, General Motors Company

Analysts downwardly revised their ratings on Zillow Group Inc (NASDAQ:Z), Yelp Inc (NYSE:YELP), and General Motors Company (NYSE:GM)

by Karee Venema

Published on Jul 20, 2015 at 9:57 AM
Updated on Jul 2, 2020 at 2:26 PM

Analysts are weighing in on real estate issue Zillow Group Inc (NASDAQ:Z), online review portal Yelp Inc (NYSE:YELP), and car concern General Motors Company (NYSE:GM). Here's a quick roundup of today's bearish brokerage notes on Z, YELP, and GM.

  • Just a few weeks ahead of a big executive shift -- and a tentatively scheduled earnings report -- Z saw its rating cut to "underweight" from "equal weight" at Barclays, which also slashed its price target on the shares to $70 from $90. Not only does this represent a 10% discount to the stock's current perch at $77.71, but it sits in territory not charted since July 2013. Longer term, the shares have struggled since topping out at an all-time high of $164.90 last July, shedding more than half their value -- and hitting a new annual low of $76.82 this morning. Short sellers, meanwhile, have been rolling the dice on additional losses. In fact, short interest on Zillow Group Inc rose 3.3% in the latest reporting period to 17.4 million shorted shares -- a record high.

  • Barclays also weighed in on YELP, lowering its outlook to "equal weight" from "overweight," and cutting its price target to $36 from $50. As such, the stock tumbled to a two-year low of $33.35 out of the gate, and was last seen off 3.7% at $33.67. Today's negative price action only echoes the equity's withstanding trajectory, with YELP down 38.5% year-to-date. While analysts have been downwardly revising their ratings in recent weeks, there's still plenty of room for more bearish brokerage notes -- which could translate into additional headwinds for Yelp Inc. Currently, 50% of covering analysts still maintain a "buy" or "strong buy" rating, while the average 12-month price target of $52.41 stands at a 56% premium to YELP's present perch.

  • J.P. Morgan Securities reduced its price target on GM to $44 from $46, sending the shares 0.3% lower at the open to $30.56. It's already been a rough ride for General Motors Company, which has shed 22% since hitting an annual high of $38.99 in mid-March. While analysts have begun re-evaluating their bullish ratings, short-term speculators have shown a distinct preference for calls over puts. In fact, GM's Schaeffer's put/call open interest ratio (SOIR) of 0.56 sits lower than 88% of all similar readings taken in the past 12 months. An unwinding of the hedges related to these call positions could pressure the shares in the near term. Looking ahead, GM will tell all in the earnings confessional later this week.

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