Analyst Update: Valero Energy, Enphase Energy, Kennametal

Analysts adjusted their ratings on Valero Energy Corporation (VLO), Enphase Energy Inc (ENPH), and Kennametal Inc. (KMT)

Dec 16, 2015 at 1:23 PM
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Analysts are weighing in today on energy interest Valero Energy Corporation (NYSE:VLO), solar name Enphase Energy Inc (NASDAQ:ENPH), and mining equipment concern Kennametal Inc. (NYSE:KMT). Here's a quick roundup of today's brokerage notes on VLO, ENPH, and KMT.

  • Despite a pullback in oil prices, VLO is 2% higher at $69.66, after Raymond James upped its price target on the stock to $75 from $72. What's more, Congress agreed to lift a 40-year ban on oil exports, though both the House and Senate must pass the legislation. Unlike most oil-exposed names, Valero Energy Corporation has put in a strong performance overall this year, adding 40.6% so far. Options traders appear doubtful, however. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 2.54 is higher than 84% of all readings in the past year.

  • ENPH has surged 35.7% to trade at $3.27, thanks to a D.C.-inspired lift for solar stocks, and after Roth upgraded the stock to "buy" and raised its price target to $4. Enphase Energy Inc was seen as high as $4.50 earlier in the day -- 87% higher over Tuesday's close. The shares gapped lower after reporting disappointing quarterly sales in November, but have erased those losses today. But while eight out of 12 analysts following ENPH give it a rating of "hold" or worse, options traders may be hoping the shares have already found a floor. The stock has a Schaeffer's put/call open interest ratio (SOIR) of 0.16 -- lower than all but 8% of readings in the past 12 months, indicating that near-term traders have recently been choosing calls over puts at an extreme rate.

  • KMT is 10.8% lower at $18.47, just off a new six-year low of $18.34, after yesterday's downwardly revised 2016 outlook earned the stock a round of bearish analyst attention. Today, Longbow Research knocked its rating on Kennametal Inc. down to "underperform," and since Tuesday morning, KMT has been handed price-target cuts from BMO Capital, J.P. Morgan Securities, Credit Suisse, Jefferies, and Stifel to name a few. The shares have already lost nearly half of their value in 2015, and near-term options traders have rarely been more put-heavy. KMT has a SOIR of 2.99, in the 96th annual percentile -- indicating nearly three puts open for every call, among options expiring within three months. 
For other stocks in analysts' crosshairs, read Analyst Upgrades: NVIDIA Corporation, Global Payments Inc, and Northrop Grumman Corporation and Analyst Downgrades: GrubHub Inc, VeriFone Systems Inc, and QUALCOMM.

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