AK Steel, Reynolds American, Travelers Downgraded

AK Steel Holding Corporation (AKS), Reynolds American, Inc. (RAI), and Travelers Companies Inc (TRV) are feeling the heat on Wall Street

Feb 13, 2017 at 9:32 AM
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Analysts are weighing in on commodity stock AK Steel Holding Corporation (NYSE:AKS), tobacco titan Reynolds American, Inc. (NYSE:RAI), and Dow component Travelers Companies Inc (NYSE:TRV). Here's a quick roundup of today's bearish brokerage notes on AKS, RAI, and TRV.

AK Steel Downgraded Again

Morgan Stanley lowered its opinion of AKS to "equal weight" from "overweight," despite the stock's huge year-over-year gains. In the past 12 months, the shares have soared over 250% at $8.48 -- and are up 1.1% this morning on reports China may force steel producers to cut output. Interestingly, bearish brokerage notes are nothing new for outperforming AK Steel Holding Corporation. Three-quarters of the analysts tracking the stock have handed out a "hold" or a "strong sell" recommendation.

Reynolds American Gets Mixed Attention

RAI is up 0.1% at $60.63, even after RBC downgraded its rating to "sector perform" from "outperform." On the other hand, RBC also raised its price target to $60 from $54, echoing a price-target hike to $60 from $52 at Barclays. Technically speaking, Reynolds American, Inc. has been on fire, and last week touched a record high of $60.91. As such, short-term open interest levels are call-skewed. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.32 indicates calls triple puts within the front three-months' series. Plus, the reading ranks in the low 7th percentile of its annual range.

Travelers Tanks on Downgrade

FBR lowered its rating on TRV to "market perform" from "outperform." As a result, the stock is down 2.3% out of the chute at $117.41. After a strong end to 2016, Travelers Companies Inc has struggled in 2017, down 4.1%. However, it seems options traders have been banking on a bounce in the shares. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TRV has racked up a 50-day call/put volume ratio of 1.97 -- just 8 percentage points from a 52-week high.

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