Analyst Update: U.S. Silica, Finisar, and Cherokee

Analysts adjusted their ratings on U.S. Silica Holdings Inc (SLCA), Finisar Corporation (FNSR), and Cherokee Inc (CHKE)

Sep 11, 2015 at 12:23 PM
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Analysts chimed in on silica producer U.S. Silica Holdings Inc (NYSE:SLCA), communications concern Finisar Corporation (NASDAQ:FNSR), and fashion firm Cherokee Inc (NASDAQ:CHKE). Here's a quick roundup of today's brokerage notes on SLCA, FNSR, and CHKE.

  • SLCA is 9.3% lower at $17.26 this afternoon after Jefferies -- which also weighed in on various members of the energy sector  -- cut its rating to "underperform" and its price target to $14. What's more, the brokerage warned that U.S. Silica Holdings Inc's price target could go as low as $10 if oil were to fall below $40 per barrel in 2016. Technically, the shares have lost 57% since hitting their most recent high of $40.17 in mid-April. Short sellers have responded, as nearly 35% of SLCA's float is sold short.

  • FNSR plunged to a new two-year low of $11.99 and is now 18.5% lower at $12.16, after the company fell short of Wall Street's estimates for its fiscal first quarter and forecast current-quarter numbers below analysts' expectations. The company added that CEO Eitan Gerte was stepping down and Executive Chairman Jerry Rawls will assume the role -- a move that Needham said, "makes us nervous." In response to the news, brokerages blasted Finisar Corporation. For instance, MKM cut FNSR's rating to "neutral" from "buy" and lowered its target to $15.50 from $25.50; Needham reduced the firm's target to $18 from $25; and Craig-Hallum slashed FNSR's target to $17 from $26. Today's drop is a continuation of an overall downtrend that has seen the shares surrender 48% from their February high of $23.38. Amid these struggles, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have upped the bearish ante, based on FNSR's 10-day put/call volume ratio of 0.56 -- in the 88th annual percentile.
  • CHKE is 31.3% lower this afternoon, trading at $16.56 after the company's second-quarter earnings and revenue fell short of expectations. In addition, Cherokee Inc's biggest customer, Target Corporation (NYSE:TGT), announced that it will not renew its license with CHKE in the U.S. after it expires on Jan. 31, 2017. This combination of news prompted Wunderlich Securities to lower the fashion firm's target price to $26, and B. Riley to issue a price-target cut to $27. Taking a step back, all four of the analysts tracking CHKE rate it a "strong buy," leaving room for more punishment in the form of downgrades
For other stocks in analysts' crosshairs, read Analyst Upgrades: Amazon.com, Inc., ZS Pharma Inc, and Oracle Corporation and Analyst Downgrades: Zumiez Inc., Halliburton Company, and Exxon Mobil Corporation
 

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