Analyst Update: GoPro Inc, Rio Tinto plc (ADR), and J C Penney Company Inc

Analysts adjusted their ratings on GoPro Inc (GPRO), Rio Tinto plc (ADR) (RIO), and J C Penney Company Inc (JCP)

by Mark Fightmaster

Published on Oct 7, 2015 at 12:21 PM
Updated on Oct 7, 2015 at 12:25 PM

Analysts are weighing in today on wearable-camera producer GoPro Inc (NASDAQ:GPRO), global mining company Rio Tinto plc (ADR) (NYSE:RIO), and retailer J C Penney Company Inc (NYSE:JCP). Here's a quick roundup of today's brokerage notes on GPRO, RIO, and JCP.

  • GPRO is 9.6% lower at $27.71, and just touched an all-time low of $27.52, after receiving a severe price-target cut at Morgan Stanley. Specifically, the brokerage cut GoPro Inc's price target to $35 from $62, citing disappointing sales of the company's Hero4 Session camera. In addition, Morgan Stanley wasn't impressed with GPRO's editing software, saying, "GoPro devices will remain a nice alternative to smartphone video capture and growth will continue to slow and fall in-line with the broader digital camera market." Shares of GPRO have fallen 72% from their all-time high of $98.47, tagged a year ago. Despite this precipitous drop, analysts maintain a bullish stance toward the firm. Out of 14 brokerages, 10 offer up "buy" or better rankings, with not a "sell" in sight. Downgrades from this bullish crew could push the stock lower still. Plus, the stock's average 12-month price target of $67.71 is more than twice the security's current price, leaving the door wide open for more price-target cuts. 

  • RIO is 7.7% higher at $38.16, after Morgan Stanley upgraded it to "overweight" from "equal weight." The brokerage made this move as it upgraded the broader metals and mining sector to "attractive" from "in line." Today's rally has the shares of Rio Tinto plc (ADR) running headlong into their 20-week moving average, which has contained a few rebound attempts over the past year. It appears that bullish option players are turning a blind eye to the stock's weakness. RIO's 50-day call/put volume ratio on the ISE/CBOE/PHLX checks in at 1.75, which is higher than 98% of the readings taken in the past 52 weeks. 
  • This morning, Citigroup initiated coverage on retailer JCP with a "sell" rating -- the opposite of this yoga apparel brand -- sending the shares 5.1% lower to $9.29. This drop positions shares of J C Penney Company Inc slightly above support from their 10-week moving average, which has emerged as support as the stock bumps up against the $10 level. Despite JCP's year-to-date gain of more than 40%, option buyers have upped the bearish ante, as the stock's 50-day put/call volume ratio of 0.83 on the ISE/CBOE/PHLX ranks in the 84th percentile of its annual range. What's more, 34% of JCP's float is sold short, and it would take eight days to exhaust these shorted shares, at the equity's average pace of trading. Any good news could send these bears scrambling to cover their short positions, which could translate into a boon for JCP. 
For other stocks in analysts' crosshairs, read Analyst Upgrades: Adobe Systems Incorporated, Lululemon Athletica inc., and Ctrip.com International Ltd. and Analyst Downgrades: Tesla Motors Inc, Yum! Brands, Inc., and Nu Skin Enterprises, Inc..

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