Analyst Update: JCPenney, Scientific Games, and Vale

Analysts adjusted their ratings and price targets on J C Penney Company Inc (JCP), Scientific Games Corp (SGMS), and Vale SA (ADR) (VALE)

Feb 26, 2016 at 2:33 PM

Analysts are weighing in on retailer J C Penney Company Inc (NYSE:JCP), lottery concern Scientific Games Corp (NASDAQ:SGMS), and mining firm Vale SA (ADR) (NYSE:VALE). Here's a quick roundup of today's brokerage notes on JCP, SGMS, and VALE.

JCP is red-hot this afternoon, following a fourth-quarter earnings beat and encouraging comments from CEO Edward Record, who said the retailer continues to "win market share in a competitive environment." The quarterly results have provoked the applause of analysts, with Craig-Hallum upping its assessment to "hold" and handing out a fresh price target of $10, Piper Jaffrey lifting its target to $20, and Cowen called J C Penney Company Inc the "best performing department store right now." On a slightly different note, Moody's upgraded the company's credit rating to B3. At last check, the shares have tacked on 15.2% to trade at $9.63, putting them on track for their highest settlement since late October. Suffice it to say, short sellers may be feeling the pain. A lofty 35.1% of JCP's float is sold short, which would take nearly two weeks to cover, at typical volumes. What's more, analysts may need to rethink their mostly skeptical coverage, as 11 of 17 rate the stock a "hold" or worse.

SGMS is also putting on a clinic, up over 33% at $8.42 -- its best day in more than 16 years -- after the company reported better-than-expected quarterly revenue. What's more, the stock is shrugging off a price-target cut to $7 from $9 at Deutsche Bank. Option traders are likely welcoming Scientific Games Corp's bullish gap with open arms. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHL), speculators have bought to open 8,525 calls versus just 11 puts. The resultant 10-day call/put volume ratio ranks in the bullishly skewed 96th percentile of its annual range.

VALE saw its price target cut to $3.50 from $5 at Nomura. As such, the stock -- which fell over 4% yesterday on poorly received earnings and plans to sell $10 billion in assets -- is down another 2.3% at $2.74. This is more of the same for Vale SA, which has plunged 63% year-over-year amid a drop in commodity prices. On the options front, however, traders have bought to open 6.35 calls for every put during the past 10 sessions at the ISE, CBOE, and PHLX. The corresponding call/put volume ratio outstrips 91% of all others from the last 12 months.

For other stocks in analysts' crosshairs, read Analyst Upgrades: Splunk Inc, Newfield Exploration Co., and Kraft Heinz Co and Analyst Downgrades: Monster Beverage Corporation, Goldcorp Inc. (USA), and Peregrine Pharmaceuticals.

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