Analyst: It's Time to Sell This Retail Stock

Nautilus, meanwhile, is being called a "compelling investment opportunity"

Apr 23, 2018 at 3:06 PM
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The broader stock market has erased its modest lead ahead of this week's onslaught of corporate earnings reports. Among individual stocks to watch are aluminum giant Alcoa Corp (NYSE:AA), Bowflex parent Nautilus, Inc. (NYSE:NLS), and homegoods retailer Pier 1 Imports Inc (NYSE:PIR), which are all seeing wild price action. Here's a quick look at moving shares of AA, NLS, and PIR.

Rusal Extension Levels Alcoa Stock

Alcoa stock has plunged 13.9% to trade at $51.64 -- its worst day since the company split back in October 2016 -- after the U.S. Treasury Department extended the deadline to Oct. 23 from June 5 for Americans to end business dealings with Russian aluminum firm Rusal as part of a broader set of sanctions imposed on Moscow. Additionally, the Trump administration is reportedly considering easing sanctions on Rusal if Oleg Deripaska gives up control of the company.

This price action marks a sharp reversal from AA stock's recent trajectory. In fact, the shares were up more than 33% for April heading into today's trading, and hit a post-split record high of $62.35 last Thursday after earnings -- prompting Deutsche Bank this morning to boost its price target to $70 from $60.

Alcoa is now down 4.4% year-to-date, though, and one group of traders is likely kicking rocks. Short interest fell 22.7% in the two most recent reporting periods to 6.86 million shares -- the fewest number of bearish bets since Nov. 1.

Nautilus Stock on Track for Best Day Since August 2016

Craig-Hallum initiated coverage on Nautilus with a "buy" rating and $19 price target -- a level not seen since last July. The brokerage firm said new product launches should help spark growth, and called NLS a "compelling investment opportunity." In reaction, NLS stock is trading up 11.2% at $14.95 -- pacing for its best day since Aug. 2, 2016, and its first close north of its 200-day moving average since July 27.

More broadly, the action among analysts has been mixed. At last Friday's close, three brokerage firms maintained a "strong buy" rating, versus three others that issued "hold" recommendations on the stock. The average 12-month price target, meanwhile, is docked at $16.22, a lukewarm 8.9% premium to current trading levels.

Pier 1 Imports Stock Plummets After Downgrade

Pier 1 Imports stock is down 9.7% to trade at $2.39, earlier hitting an eight-year low of $2.37. Sparking the sell-off is a downgrade to "underperform" from "market perform" at Raymond James, which said to "exit the shares now" before management begins executing a strategic initiative that will likely not create growth until 2021.

PIR stock is now staring at a 66.4% year-over-year deficit, and short sellers have started cashing out of their winning bets. Short interest fell 18.6% between the March 1 and April 1 reporting periods to 11.09 million shares. This still represents a healthy 14.8% of the retailer's available float, though.


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