Analyst Downgrades: Red Hat Inc, Caterpillar Inc., and Mosaic Co

Analysts downwardly revised their ratings on Red Hat Inc (RHT), Caterpillar Inc. (CAT), and Mosaic Co (MOS)

by Alex Eppstein

Published on Sep 22, 2015 at 9:25 AM

Analysts are weighing in today on software firm Red Hat Inc (NYSE:RHT), blue chip Caterpillar Inc. (NYSE:CAT), and fertilizer company Mosaic Co (NYSE:MOS). Here's a quick roundup of today's bearish brokerage notes on RHT, CAT, and MOS.

  • RHT reported better-than-expected earnings last night, as well as a 13% year-over-year increase in revenue. The company also upped its current-quarter and full-year guidance. None of that was enough to stop Cowen and Company from trimming its price target on the stock to $82 from $85, and sending it 1.7% lower ahead of the open. Technically speaking, Red Hat Inc has been consolidating atop its rising 50-week moving average for over one month, and closed yesterday at $72.72. Traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) are counting on a downturn. During the past 10 days across those exchanges, RHT has racked up a put/call volume ratio of 1.27 -- just 9 percentage points from an annual high.

  • CAT has lost more than one-fifth of its value year-to-date, at $72.16. In fact, the stock sits just 2.7% above its nearly four-year low of $70.23, which it skimmed in late August. Caterpillar Inc. is on track to give back another 1.6% at the open, after SocGen cut its price target by $6 to $104. In the options pits, traders have been upping the bearish ante, as well. CAT's 50-day ISE/CBOE/PHLX put/call volume ratio checks in at 2.00, with long puts doubling calls. On top of that, this ratio is higher than 89% of comparable readings recorded in the past 12 months.

  • Citing weak demand, MOS announced it will reduce its potash output, and lowered its current-quarter sales guidance. Adding insult to injury, Canaccord Genuity and Susquehanna reduced their respective price targets to $35 and $50, pressuring the shares 3.3% lower in pre-market trading. It's already been a brutal 2015 for Mosaic Co, which has surrendered one-fifth of its value to close Monday at $36.44 -- after hitting an intraday (and six-year) low of $36.13. Option bulls, however, have kept the faith. MOS' 10-day ISE/CBOE/PHLX call/put volume ratio of 5.66 outranks 78% of comparable readings from the past year.

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