Analyst Downgrades: Nike Inc, Seadrill Ltd, and Vale SA

Analysts downwardly revised their ratings on Nike Inc (NKE), Seadrill Ltd (SDRL), and Vale SA (ADR) (VALE)

Dec 2, 2015 at 9:28 AM
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Analysts are weighing in on athletic apparel juggernaut Nike Inc (NYSE:NKE), offshore driller Seadrill Ltd (NYSE:SDRL), and mining magnate Vale SA (ADR) (NYSE:VALE). Here's a quick roundup of today's bearish brokerage notes on NKE, SDRL, and VALE.

  • Goldman Sachs removed NKE from its "Americas Conviction Buy" list, and trimmed its price target to $148 from $150. The downbeat note has the stock pointed 1% lower pre-market, following yesterday's close at $133.31. Technically speaking, Nike Inc is a long-term winner, tacking on 38.6% in 2015 and hitting an all-time peak of $135.30 last week. There's no shortage of optimism among the brokerage crowd, either. Twenty of 24 analysts rate NKE a "buy" or better, with not a single "sell" recommendation on the record. Plus, the consensus 12-month price target of $140.71 stands in previously uncharted territory.
  • Seaport Global Securities slashed its price target on SDRL to $6.70 from $7.50, pressuring the shares 3.5% lower ahead of the open. The stock is no stranger to steep losses, surrendering almost half its value in 2015 to rest at $6.09. Short sellers, meanwhile, are counting on an extended decline in Seadrill Ltd. Over 13% of the equity's float is sold short, representing around seven days' worth of trading activity, at typical volumes.
  • VALE saw its price target cut by Nomura and BMO to $6 and $3, respectively, after the company said yesterday that 2016 will be a "challenging year, with unfavorable supply and demand balance and volatile commodities prices." Moreover, the company cut its iron ore production guidance by 10%, and also estimated it will need to spend at least $443 million in response to a mine disaster in Brazil. On the charts, Vale SA hit a 12-year low of $3.26 yesterday before closing at $3.36, down almost 60% on the year. However, expectations appear to be high at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). VALE's 50-day call/put volume ratio checks in at 2.33 -- the loftiest reading in the past year -- with long calls more than doubling puts.

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