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)

by Alex Eppstein

Published on Dec 2, 2015 at 9:28 AM
Updated on Jun 24, 2020 at 10:16 AM

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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