Analyst Update: Staples, Ralph Lauren, Sunedison Semiconductor

Analysts revised their ratings and price targets on Staples, Inc. (SPLS), Ralph Lauren Corp (RL), and Sunedison Semiconductor Ltd (SEMI)

May 11, 2016 at 3:15 PM
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Analysts are weighing in on retailers Staples, Inc. (NASDAQ:SPLS) and Ralph Lauren Corp (NYSE:RL), as well as semiconductor stock Sunedison Semiconductor Ltd (NASDAQ:SEMI). Here's a quick roundup of today's brokerage notes on SPLS, RL, and SEMI.

  • SPLS is down 18.3% at $8.47 -- lingering near its mid-February lows -- after the firm called off its plans to buy rival company Office Depot Inc (NASDAQ:ODP). Following a judge's temporary halt of the deal, the Federal Trade Commission (FTC) issued a statement, saying a SPLS-ODP  merger would "likely lead to higher prices and lower quality service for large businesses." Analysts were quick to weigh in on both retail stocks, and for SPLS, this resulted in a downgrade to "hold" at Jefferies, which also lowered its price target to $9. UBS showed similar sentiment, slashing its rating to "neutral" and cutting SPLS' price target to $10.50. Options traders, it appears, have been bracing for a pullback. In fact, Staples, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 1.25 sits in the 100th annual percentile, showing that near-term options traders are more put-skewed now than at any other time in the past year.

  • RL is down 4.6%, at $85.22, before it follows its fellow retailers into the earnings confessional tomorrow morning. Ahead of the event, UBS slashed its price target on RL to $115 from $118. Ralph Lauren Corp shares have been struggling to break out above the $100 level since plummeting 22.2% in the wake of February's negative earnings reaction. As such, the stock has underperformed the broader S&P 500 Index (SPX) by 11.2 percentage points over the last 40 sessions. Amid this negative price action, short sellers have been climbing on -- betting on more downside for the struggling retailer. Specifically, short interest surged 10% in the two most recent reporting periods, but still accounts for just 8.2% of the stock's available float. RL could face additional headwinds, should short sellers continue to increase their bearish exposure.

  • SEMI is down 10.5% at $4.18 -- two days after an earnings report revealed a diluted first-quarter loss of $2.79 per share. Additionally, the stock is reacting to a trio price-target cuts from Citigroup (to $4), Deutsche Bank (to $7), and Goldman Sachs (to $6.70).  On the charts, Sunedison Semiconductor Ltd has recovered over 28% since hitting an all-time low of $3.47 in February, but remains 47% lower year-to-date. More bearish brokerage notes could be on the horizon, too, considering of the three analysts covering the shares, two maintain a "strong buy" rating, with not a single "sell" to be found.

For other stocks in analysts' crosshairs, read Analyst Upgrades: Barrick Gold Corporation, Kinross Gold Corporation, and Yamana Gold Inc. and Analyst Downgrades: Office Depot Inc, Nokia Corp, and Fossil Group Inc


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