Sotheby’s Finds Out That Research Analysts Matter, Maybe Too Much

Sometimes analyst upgrades and downgrades matter, and sometimes they do not.  Sotheby’s (NYSE: BID) is finding that they sure matter this Monday.  We might usually skip an analyst upgrade or downgrade on a company of this size, but today’s unusual trading activity stems from two analyst downgrades in the same day.  To add to the intrigue here, both downgrades are from what most investors would consider boutique firms.

A firm called Craig-Hallum downgraded the rating to Hold from Buy, and the other downgrade was by a firm called Stephens with the downgrade going to Equal-Weight from Overweight.  If you asked the investing public who those firms were it is unlikely that very many of those investors would even know. What hurts more than anything is that Sotheby’s apparently only has 7 or so analysts covering its shares with formal Buy/Sell targets.

Trading volume has not even yet crossed the average daily volume of 1.16 million shares.  As of almost 2:00 PM EST we have shares down 4.1% at $30.97 on 1.07 million shares.  The market cap is almost $2.1 billion and the 52-week trading range is $25.00 to $45.93.

It sure likes like the analysts mattered today.

JON C. OGG