Analyst Downgrades: Tesla Motors Inc, Yum! Brands, Inc., and Nu Skin Enterprises, Inc.

Analysts downwardly revised their ratings on Tesla Motors Inc (NASDAQ:TSLA), Yum! Brands, Inc. (NYSE:YUM), and Nu Skin Enterprises, Inc. (NYSE:NUS)

by Karee Venema

Published on Oct 7, 2015 at 9:59 AM
Updated on Oct 7, 2015 at 10:01 AM

Analysts are weighing in on electric car concern Tesla Motors Inc (NASDAQ:TSLA), fast-food specialist Yum! Brands, Inc. (NYSE:YUM), and personal care purveyor Nu Skin Enterprises, Inc. (NYSE:NUS). Here's a quick roundup of today's bearish brokerage notes on TSLA, YUM, and NUS.

  • Although TSLA has bounced over 20% since hitting its most recent low of $195 in late August -- with the shares last seen at $234.21 -- analysts continue to issue bearish brokerage notes toward the stock. Today, for instance, Baird lowered its outlook on the shares to "neutral" and its price target to $282 from $335, saying it sees "limited visibility to positive catalysts until the release of the Model III prototype." This skepticism is seen elsewhere on the Street, as well, with more than one-quarter of Tesla Motors Inc's float sold short -- or 7.3 times the average daily trading volume. Should the shares resume their recent run higher, a round of upgrades and/or short covering could create tailwinds.

  • YUM plunged 18.9% out of the gate to $67.68 -- erasing its year-to-date gains -- after the company's disappointing earnings was met with bearish backlash from the brokerage bunch. J.P. Morgan Securities, for instance, lowered its price target to $87 from $103, while Stifel cut its target price by $10 to $100. Should the shares extend today's negative price action, more bearish brokerage notes could be on the horizon. Currently, eight out of 17 analysts maintain a "strong buy" rating toward Yum! Brands, Inc., with not a single "sell" to be found. Plus, the average 12-month price target of $95.37 sits in territory not charted since late May.

  • NUS is down 20.8% at the open to churn near $36.89 -- and earlier touched a nearly three-year low of $36.43 -- thanks to the firm's lower-than-expected third-quarter sales forecast. Adding to the bearish bias is a round of negative analyst notes, including a downgrade to "sell" from "hold" at Stifel and a price-target cut to $40 from $44 at BofA-Merrill Lynch. Heading into today's trading, the stock was sitting on a 6.6% year-to-date lead. Nevertheless, option traders have been bracing for a pullback, per Nu Skin Enterprises, Inc.'s 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 9.38 -- in the 92nd percentile of its annual range. In other words, puts have been bought to open over calls at a faster clip just 8% of the time within the past year.
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