Analyst Downgrades: Freeport-McMoRan, Chevron, Exxon Mobil

Analysts downwardly revised their ratings and price targets on Freeport-McMoRan Inc (NYSE:FCX), Chevron Corporation (NYSE:CVX), and Exxon Mobil Corporation (NYSE:XOM)

Josh Selway

Sep 1, 2015 at 9:40 AM

Analysts are weighing in on commodity stocks Freeport-McMoRan Inc (NYSE:FCX), Chevron Corporation (NYSE:CVX), and Exxon Mobil Corporation (NYSE:XOM). Here's a quick roundup of today's bearish brokerage notes on FCX, CVX, and XOM.

FCX's recent batch of put buyers are likely cheering this morning, with the stock down 4.3% at $10.19, after a downgrade at Citigroup. Specifically, the brokerage firm cut the stock to "neutral" from "buy," while lowering its price target by $8 to $12, saying the sector hasn't reduced production enough to account for falling prices. It's probably not just options bears who are happy, though. Short interest jumped over 44% during the two most recent reporting periods, and now accounts for a healthy 6.1% of the equity's available float. Year-to-date, Freeport-McMoRan Inc is down roughly 56%.

CVX has given back 2.9% to trade at $78.67, after HSBC reduced its price target to $97 from $125, but kept its "buy" assessment. Many on the Street share HSBC's bullish opinion on the stock, with six out of 15 brokerage firms calling Chevron Corporation a "buy" or better -- even with the shares roughly 30% lower in 2015. If analysts begin to throw in the towel amid ongoing technical struggles, it could spark extended losses for CVX.

Lastly, XOM is off 3% in early trading -- putting the shares at $72.99 -- as HSBC lowered its price target to $77 from $90. The stock has underperformed the S&P 500 Index (SPX) during the past three months amid oil's decline, which may explain why short-term speculators have targeted puts over calls. For instance, Exxon Mobil Corporation's Schaeffer's put/call open interest ratio (SOIR) stands at 1.08 -- higher than 86% of all such readings from the past year, signaling a put-skewed bias among traders targeting options with a lifespan of three months or less.

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