Analyst Downgrades: CIT Group Inc., Cliffs Natural Resources Inc, and Wal-Mart Stores, Inc.

Analysts downwardly revised their ratings and price targets on CIT Group Inc. (CIT), Cliffs Natural Resources Inc (CLF), and Wal-Mart Stores, Inc. (WMT)

by Alex Eppstein

Published on Oct 7, 2016 at 9:54 AM

Analysts are weighing in on bank stock CIT Group Inc. (NYSE:CIT), miner Cliffs Natural Resources Inc (NYSE:CLF), and retail giant Wal-Mart Stores, Inc. (NYSE:WMT). Here's a quick roundup of today's bearish brokerage notes on CIT, CLF, and WMT.

  • CIT is up 2% at $37.14, after the company agreed to sell its aircraft leasing business to Avolon Holdings Ltd (NYSE:AVOL) for $10 billion. In response, Stifel slashed its rating to "hold" from "buy," but upwardly adjusted its price target to $41 from $40. Earlier, CIT Group Inc. jumped as high as $37.89 -- its loftiest level since early January. This should serve as a welcome development for options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), who have bought to open more than five CIT calls for every put in the past two weeks. The resultant call/put volume ratio of 5.27 outstrips 71% of all readings from the prior 52 weeks.
  • Credit Suisse reinstated its "underperform" rating and $2 price target on CLF. Out of the gate, however, the stock is up 0.4% at $5.60, and has surged 254% on a year-to-date basis. Despite today's negative note, bullish brokerage attention could actually be headed the way of Cliffs Natural Resources Inc. After all, five of seven analysts have handed the long-term outperformer either a "hold" or a "sell" assessment. Should upgrades start to roll in, CLF stock could trek even higher.
  • Just a day after WMT provided a guidance update -- and gapped 3.2% lower as a result -- analysts are panning the retail stock. Specifically, Barclays, Deutsche Bank, Tesley Advisory, and J.P. Morgan Securities all trimmed their price targets on the shares. This morning, Wal-Mart Stores, Inc. is down another 1.5% at $68.33, pulling back back sharply from its mid-August highs around $75. The stock could be hit with additional headwinds if short sellers keep piling on. During the most recent reporting period, short interest jumped 11.2% -- but still represents a slim 2.2% of WMT stock's total float, leaving plenty of room for more short selling.
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