Analyst Downgrades: Barrick Gold Corporation (USA), HollyFrontier Corp, and Krispy Kreme Doughnuts

Analysts downwardly revised their ratings and price targets on Barrick Gold Corporation (USA) (NYSE:ABX), HollyFrontier Corp (NYSE:HFC), and Krispy Kreme Doughnuts (NYSE:KKD)

by Karee Venema

Published on Mar 23, 2016 at 9:59 AM

Analysts are weighing in on gold stock Barrick Gold Corporation (USA) (NYSE:ABX), petroleum refiner HollyFrontier Corp (NYSE:HFC), and doughnut distributor Krispy Kreme Doughnuts (NYSE:KKD). Here's a quick roundup of today's bearish brokerage notes on ABX, HFC, and KKD.

  • Heading into today's trading, ABX had nearly doubled in value year-to-date, and hit an annual high of $15.52 last Thursday. Nevertheless, Deutsche Bank lowered its rating to "hold" from "buy" -- while waxing optimistic on this other commodity stock -- which has sent the shares down 7.8% this morning to $13.37. Meanwhile, in the options pits, short-term speculators are more put-skewed now than they've been at any other point during the past year, per ABX's Schaeffer's put/call open interest ratio (SOIR) of 1.41 - an annual high. Should Barrick Gold Corporation resume its longer-term uptrend, an unwinding of the hedges related to these bearish bets could help propel the shares even higher.

  • Goldman Sachs cut its outlook for HFC to "sell" from "neutral," and cut its price target to $34 from $37, citing concerns over valuation and earnings per share. As such -- and amid falling oil prices -- the shares are down 4.4% to $36.69. Longer term, HollyFrontier Corp has added nearly 27% since hitting a three-year low of $29 in mid-February. Short sellers, however, have been ramping up their bearish exposure. Short interest surged 10.7% in the most recent reporting period to 10.10 million shares -- the loftiest amount since early September.

  • KKD has shed 7.4% out of the gate to trade at $14.25, after the company's fourth-quarter revenue miss and lackluster guidance was met with a price-target cut to $21 from $22 at Wedbush. Today's negative price action only echoes the equity's technical troubles, with shares of KKD off more than 31% year-over-year. Options traders, however, have been scooping up long calls at a rapid-fire rate ahead of earnings, as evidenced by KKD's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.38 -- in the 79th annual percentile. Krispy Kreme Doughnuts could encounter a fresh wave of selling pressure, should these option bulls jump ship.
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