Analyst Update: Celadon Group, Inc., Freeport-McMoRan Inc, and L Brands Inc

Analysts are weighing in on Celadon Group, Inc. (CGI), Freeport-McMoRan Inc (FCX), and L Brands Inc (LB)

Nov 17, 2016 at 3:50 PM
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U.S. stocks are higher, after a round of promising economic data and remarks by Fed Chair Janet Yellen. Among the stocks in focus today are transportation stock Celadon Group, Inc. (NYSE:CGI), mining stock Freeport-McMoRan Inc (NYSE:FCX), and retailer L Brands Inc (NYSE:LB). Here's a quick roundup of today's brokerage notes on CGI, FCX, and LB.

  • CGI is up 8.8% at $8.05, after a price-target hike to $11 from $10 by Stephens. The stock has rallied roughly 66% since touching $4.85 -- its lowest level since March 2009 -- earlier this month, but is still 72% off its March 2015 peak north of $29. The stock's upward momentum could stall in the $8.50-$9 area -- home to its 160-day moving average, which capped recent advances. In the option pits, recent buyers are likely getting nervous after today's jump. Though Celadon Group, Inc. option volume is light on an absolute basis, the stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 15 puts bought to open for every call, a reading that sits just 1 percentage point from an annual peak.

  • FCX is trading down 0.4% at $13.75, after a cut to "hold" from "buy" by Deutsche Bank. In addition, Freeport yesterday announced it closed the sale of its stake in the Democratic Republic of Congo's Tenke mines for $2.65 billion. While FCX has more than doubled so far in 2016, gapping higher after the presidential election lifted copper prices, the stock's rally attempts have run into problems in the $14 area, which has acted as a roadblock since mid-2015. Today's drop may have been in the cards for Freeport-McMoRan Inc shares, given their 14-day Relative Strength Index (RSI) as of Wednesday's close sat at 77 -- in "oversold" territory, indicating the possibility of a short-term breather.

  • Retail stock LB is trading up 2.1% at $69.38, erasing early losses stemming from a lackluster full-year forecast. The stock has since come under fire from analysts, with Wedbush cutting its price target to $63 from $66, and trimming its earnings estimates through 2018, predicting additional headwinds for Victoria's Secret. FBR also lowered its price target, to $69 from $75. L Brands Inc shares have had a rough 2016, down by over 26% so far, with several rally attempts since August rejected by their 160-day moving average. Ahead of earnings, option buyers were betting on more downside, with LB's 10-day ISE/CBOE/PHLX put/call volume ratio indicating 2.11 puts bought to open for every call over the last two weeks -- a reading that sits in the bearishly skewed 68th percentile of its annual range. If history is any guide, these bears may be in for more unpleasant surprises in the next week, considering LB has historically been one of the best-performing S&P 500 Index (SPX) stocks to own during Thanksgiving week.
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