COF is sitting out the broader bank stock rally
Analysts are weighing in on bank stock Capital One Financial Corp. (NYSE:COF), home goods retailer Pier 1 Imports Inc (NYSE:PIR), and packaged foods concern General Mills, Inc. (NYSE:GIS). Here's a quick roundup of today's bearish brokerage notes on shares of COF, PIR, and GIS.
Capital One Must Resubmit Capital Plan
While the Fed approved Capital One Financial's plan to return capital in the latest series of stress tests, the bank must resubmit its plan (subscription required) by Dec. 28, because it doesn't consider risks in "one of its most material businesses," the central bank said. Capital One said it will maintain its quarterly dividend of 40 cents per share, but plans to buy back up to $1.85 billion in shares of common stock through 2018. Against this backdrop, Credit Suisse cut its price target on COF stock to $92 from $95.
Capital One stock is down 1.5% to trade at $81.75, sitting out the broader bank rally, and could now struggle with resistance from its descending 80-day moving average. Options traders are certainly betting on more downside for the shares. COF has a 10-day put/call volume ratio of 8.11 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 90th percentile of its annual range.
Pier 1 Stock Sells Off After Earnings
Pier 1 Imports reported a smaller-than-expected per-share loss for the first quarter, but sales fell short of expectations. No fewer than four analysts reduced their price targets on PIR stock, including a drop to $4 from $5 at Deutsche Bank, which also confirmed a "sell" rating. PIR stock has been trending lower since its late 2016 peak, and more recently has been pressured by its 10-week moving average. At last check, Pier 1 shares were trading at $4.73, down 12.1% today and landing on the short-sale restricted list -- though most short sellers have already made their move. By the numbers, short interest represents more than one-fifth of PIR's available float.
GIS Stock Struggles Near 80-Day
General Mills stock yesterday rebounded from new-low territory, after the company reported well-received earnings. However, GIS stock ran into a wall in the form of its 80-day moving average. Today, the cereal maker's shares are 0.7% lower, last seen at $56.03, following a price-target cut to $62 from $65 at RBC. Analysts are already extremely bearish on GIS. There are 13 brokerage firms with coverage on the stock, and just one says it's a "buy."