Analyst Downgrades: Caterpillar Inc., Twitter Inc, and Facebook Inc

Analysts downwardly revised their ratings and price targets on Caterpillar Inc. (CAT), Twitter Inc (TWTR), and Facebook Inc (FB)

Jan 25, 2016 at 10:02 AM
facebook twitter linkedin

Analysts are weighing in on construction equipment maker Caterpillar Inc. (NYSE:CAT), microblogging site Twitter Inc (NYSE:TWTR), and social media giant Facebook Inc (NASDAQ:FB)Here's a quick roundup of today's bearish brokerage notes on CAT, TWTR, and FB.

  • CAT is down 3.2% at $59.06, after receiving a downgrade to "sell" from "neutral," and a price-target cut to $51 from $67, at Goldman Sachs. The brokerage cited expectations of "sustained lower returns" in the sector, and offered a lower 2017 earnings outlook for Caterpillar Inc. The company is set to report quarterly financials on Thursday. And unlike the previous quarter, it looks like option traders are now expecting a negative reaction from CAT. Specifically, the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the 97th percent of its annual range, at 3.51 -- meaning more than three CAT puts have been bought for each call over the last 10 trading days. 
  • After announcing the departure of four top executives, TWTR is down 5.3% at $16.88. Twitter Inc was downgraded to "hold" from "buy" at Stifel, while SunTrust Robinson and Pivotal slashed their price targets on the stock -- to $26 and $34, respectively. The security has been struggling since October, and tapped a new all-time low of $15.48 last Wednesday. Some option traders appear ready for a bounce, however. At the ISE, CBOE, and PHLX, TWTR's 50-day call/put volume ratio of 3.11 is higher than 94% of all readings from the past year.
  • FB received a price-target cut to $120 from $125 at SunTrust Robinson, ahead of its quarterly earnings report, due this Wednesday. Facebook Inc shares are still up 1.1% at $99.04, extending a recent rebound off their 200-day moving average. Analysts appear highly optimistic, with 28 out of 29 brokerages sitting on "buy" or better ratings. Short interest on FB also fell by 22% during the most recent reporting period, showing some bears have been backing off their positions. But option traders may not be completely convinced that another high is ahead for the security. FB's 50-day put/call volume ratio at the ISE, CBOE and PHLX is higher than 92% of the past year's readings, at 0.51.

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report


Special Offers from Schaeffer's Trading Partners