Schaeffer's 43rd Anniversary Stock Picks in 2024

Analyst Downgrades: Abercrombie & Fitch Co., American Eagle Outfitters, and J C Penney Company Inc

Analysts downwardly revised their ratings and price targets on Abercrombie & Fitch Co. (ANF), American Eagle Outfitters (AEO), and J C Penney Company Inc (JCP)

May 17, 2016 at 9:26 AM
facebook X logo linkedin

Analysts are weighing in on retail stocks Abercrombie & Fitch Co. (NYSE:ANF)American Eagle Outfitters (NYSE:AEO), and J C Penney Company Inc (NYSE:JCP). Here's a quick roundup of today's bearish brokerage notes on ANF, AEO, and JCP.

  • Cowen and Company and Deutsche Bank cut their price targets on ANF, to $25 and $23, respectively -- right in line with the stock's Monday close of $24.26. Abercrombie & Fitch Co. is due to report quarterly earnings in just over a week, and some recent bearish options traders are apparently expecting the stock to suffer the same fate as many of its sector peers. The shares have given up more than a quarter of their value since hitting an annual high of $32.83 in March, while recently losing a technical foothold, and short sellers have been targeting further losses. A full 25% of ANF's float is wrapped up in these bearish bets, which would take more than two weeks to cover, at the equity's average daily volume.
  • AEO also received price-targets cuts from Cowen and Company (to $16) and Deutsche Bank (to $16), just adding to the stock's bearish backdrop. The shares finished Monday at $14.15 -- off nearly 9% year-to-date -- and more than half of the analysts following American Eagle Outfitters rate the security a "hold" or "strong sell." Short interest has also been on the rise, representing over 23% of the stock's total float, or roughly nine sessions' worth of trading, at typical daily volumes. And near-term options traders are at a put-skewed extreme, according to AEO's Schaeffer's put/call open interest ratio (SOIR) of 1.34 -- in the top percentile of its 12-month range. The company is due to report first-quarter earnings before the market opens Wednesday.
  • BMO lowered its price target on JCP to $9 from $10, but the stock seems to be shaking off the bearish note, up 0.8% ahead of the bell after closing at $7.39 on Monday. J C Penney Company Inc has shed over 38% since hitting a two-year high of $11.99 in March, and last week's disappointing earnings did nothing to slow down the shares' slide. But with a 14-day Relative Strength Index (RSI) of 22 -- deep into oversold territory -- the equity could be due for a bounce.
Sign up now for Schaeffer's Opening View newsletter to get a head start on all the major pre-market news!

A.I.’s Dirty Little Secret: The Real Power Behind The AI. Boom ✨

Anyone who’s seen the The Matrix movies knows that A.I. needs power.  Lots and lots of power.

If you’ve seen the movie, you also know the grizzly results of the ensuing battle for that power.

Now, Wall Street’s battle for A.I. power won’t go to such extremes. Hopefully?

A.I. needs more power and that means more opportunities for stock traders in the know.

Download your free copy of “The A.I. Revolution: 4 Stocks to Buy Now”!