Analyst Update: Flowers Foods, Inc., SunPower Corporation, and A Schulman Inc

Analysts revised their ratings and price targets on Flowers Foods, Inc. (FLO), SunPower Corporation (SPWR), and A Schulman Inc (SHLM)

Aug 11, 2016 at 3:29 PM
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Analysts are weighing in on bakery product stock Flowers Foods, Inc. (NYSE:FLO), solar energy stock SunPower Corporation (NASDAQ:SPWR), and plastics producer A Schulman Inc (NASDAQ:SHLM). Here's a quick roundup of today's brokerage notes on FLO, SPWR, and SHLM.

  • FLO is down 8.8% at $14.73 – and earlier touched a three-year low of $14.35 – after yesterday's announcement that the U.S. Department of Labor has scheduled a compliance review under the Fair Labor Standards Act (subscription required). FLO followed that up last night by reporting weaker-than-expected second-quarter sales and downwardly revising its full-year guidance. Adding to FLO's woes, Jefferies cut its price target to $20 from $23, and Pivotal Research reiterated a "sell" rating and paltry $4 price target (a 73% discount to the stock's current price), saying, "Based on the content of the [earnings] call this morning, we are not at all sure the company will survive in its present form for its 100th birthday" in 2019. Further, the analyst warned, "Flowers is one large fine away from a balance sheet crisis," and opined that its price target and valuation seem "irrelevant," as "the real analysis now is to determine if FLO can remain a going concern." Flowers Foods, Inc. is down over 31% year-to-date, and has dropped 16.7% already this week. There's likely some bearish options traders cheering today's downward spiral, with FLO's 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 16.66 sitting higher than 69% of all other readings from the past 12 months.
  • SPWR is up 3.6% at $10.68 -- a slight rebound after hitting a post-earnings three-year low of $10.15 yesterday. The stock has suffered no fewer than four downgrades since earnings, and last night Barclays downgraded the stock to "equal weight" from "overweight," and nearly halved its price target to $12 from $23. This latest negative analyst attention comes as SunPower Corporation is down over 64% so far in 2016. Bullish option players are likely kicking rocks today, with SPWR's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.92 sitting higher than 96% of all other readings from the past year.
  • SHLM is down 27.3% at $21.80 -- and earlier touched a four-year low of $19.58 -- after downwardly revising its full-year forecast. The stock has been the worst performer on the Nasdaq today. Following the dismal report, Longbow cut SHLM to "neutral" from "buy," and the stock is currently down over 38% year-over-year. There probably won't be much cheering in the options pit over this latest development, with A Schulman Inc's Schaeffer's put/call open interest ratio (SOIR) of 0.40 sitting in the bottom 20th percentile of its annual range, suggesting a relatively strong call bias among near-term option players.
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