Investing

Wall Street Analysts Issue More Sell Ratings on Big Stocks

Despite the fact that the market has enjoyed a nice bounce from the January sell-off, we are noticing that more and more Sell ratings are starting to hit our daily runs of research. Some of the Sell ratings are simply because of bad earnings, but many seem to be directed at companies that are either fully valued or are losing market share. The cuts even seem to be more drastic if the company is a niche player.

24/7 Wall St. wants to keep readers fully informed on Sell ratings. Many firms, despite their dedication to fiduciary responsibility, are sometimes a little negligent when it comes to informing clients holding stocks cut to a Sell rating. By the time some investors find out, the damage is done and it is too late.

Here are more big name stocks to Sell from big firms that we have seen in Wall Street coverage.

Alpha Natural Resources Inc. (NYSE: ANR) is a stock to Sell at Merrill Lynch. The company has experienced a steep decline in earnings per share in the most recent quarter, in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. It is losing money, and the coal business flat out stinks. The Merrill Lynch price target goes from $5 to $4. The Thomson/First Call estimate is at $7.39. Shares closed Thursday at $5.17.

Deere & Co. (NYSE: DE) has been a Key Call Sell at UBS and remains on the list. The analyst’s main concern is that farm fundamentals (and equipment orders), commodity prices, land values and income will deteriorate as the second half unfolds, which is their base case, and weakness could continue into 2015. Investors are paid a 2.3% dividend. The UBS price target is now $75, up from $72. The consensus is at $87.05. Deere closed Thursday at $85.85.

EastGroup Properties Inc. (NYSE: EGP) is a new Sell at Cantor Fitzgerald and SunTrust. The bottom line for investors is the stock trades at 30% premium to its net asset value. That is more than enough for Wall Street firms to make a valuation call on the stock. Investors are paid a 3.5% dividend. The Cantor Fitzgerald price target is $54.50. The consensus estimate is at $63. EastGroup closed Thursday at $60.80.

Entergy Corp. (NYSE: ETR) is also a stock to Sell at UBS. The company has decided to stay the course with its nuclear power plants, and that does not sit that well with the UBS team. Possible litigation risks and the always possible nuclear accident risk outweigh the positive dividend and demand for energy. Investors are paid a 5.3% dividend. UBS raised its price objective from $57 to $59. The consensus is at $63.06. Entergy ended Thursday at $64.43.

Itron Inc. (NASDAQ: ITRI) was blasted to an Underweight or Sell rating at J.P. Morgan. The company provides metering solutions, meter data management software and knowledge application solutions to electric, natural gas and water utilities worldwide. Fourth-quarter earnings were lousy. Guidance for fiscal year 2014 was lousy. Despite some positives, J.P. Morgan only saw one way to call it — the price target for the stock cut from $41 to $30. The consensus target is temporarily posted at $44.18, but that should change. The stock closed Thursday down more than 15% at $33.64.

Seattle Genetics Inc. (NASDAQ: SGEN) is a high-flying name that gets a Sell rating from Cantor Fitzgerald. While the stock has rallied on the positive Adcetris sales and news, the Cantor Fitzgerald team feels that flat out, the valuation is not justified, especially when that one product comprises the lion’s share of overall corporate valuation. The Cantor Fitzgerald price target is an eye-popping $24. The consensus target is $44.33. The stock closed Thursday at $51.05.

SunPower Corp. (NASDAQ: SPWR) is another Merrill Lynch name to Sell. Talk about another valuation call, SunPower was up 431% in 2013 and is up 6% year to date. The company has delivered solid earnings off very lowered expectations. Merrill Lynch does not see that continuing. It has a price target of $21, which was raised from $18. The consensus target for the solar company is $32.88. The stock closed Thursday at $33.19.

Wall Street firms are getting tough, and after years of keeping the research kid-gloves on, it is a good thing to see. While owning a stock that goes down hard is always tough, it is worse when you do not get the truth about the situation. From our vantage point, Wall Street firms are doing just that. That is good for investors.

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