Analyst Downgrades: Deere, Potash Corporation, and FireEye

Analysts downwardly revised their ratings on Deere & Company (NYSE:DE), Potash Corporation of Saskatchewan (USA) (NYSE:POT), and FireEye Inc (NASDAQ:FEYE)

Karee Venema
Oct 5, 2015 at 10:25 AM
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Analysts are weighing in on farm equipment concern Deere & Company (NYSE:DE), fertilizer firm Potash Corporation of Saskatchewan (USA) (NYSE:POT), and cybersecurity specialist FireEye Inc (NASDAQ:FEYE). Here's a quick roundup of today's bearish brokerage notes on DE, POT, and FEYE.

  • DE is up 3.4% out of the gate to trade at $76.08, after the company reached a six-year labor agreement with the United Auto Workers union. Not everyone is waxing optimistic over the news, though, with Jefferies lowering its price target on DE to $70. It's been a tough year for Deere & Company, which was down nearly 17% heading into today's trading -- and hit a three-year low of $71.85 on Friday. Short-term option traders, meanwhile, have rarely been as put-heavy as they are now. Specifically, Deere & Company's Schaeffer's put/call open interest ratio (SOIR) of 3.55 sits just 3 percentage points from a 52-week peak.

  • A price-target cut to $25 from $30 at Barclays is not stopping POT today, with the shares up 2.4% at $21. Instead, it appears traders are cheering news the company has withdrawn its roughly $8.8 billion bid for German rival K+S AG. Longer term, POT has been a laggard on the charts, down 40.5% year-to-date. While analysts have taken the skeptical route toward the stock in recent weeks, option traders have been betting on a bounce. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Potash Corporation of Saskatchewan's 10-day call/put volume ratio of 3.74 sits higher than 69% of all similar readings taken in the past year. In other words, calls have been bought to open over puts at a faster-than-usual clip.

  • Piper Jaffray lowered its outlook for FEYE to "neutral" from "overweight" and its price target to $37 from $60, sending the shares down 5.6% at $31.22. The brokerage firm cited increased competition in the cybersecurity sector -- with some components recently coming under the M&A spotlight -- while stating "the top four firewall vendors (~48 pct of the total firewall market)  now have their own 'sandbox' technology." Additionally, analysts "are concerned that the recent string of departures could create disruption at the company, potentially impacting product development or sales growth." Nevertheless, FireEye Inc is finding a foothold near the round-number $30 mark -- a level that hasn't been breached since early January. On the sentiment front, short interest represents 15.8% of the stock's available float, or 5.6 times the average daily trading volume.
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