Investing

Bull Market Panic? 11 Stocks Analysts Want You to Sell Right Now

Jon C. Ogg

Published: November 7, 2017 3:08 pm

Last Updated: January 12, 2020 6:32 am

It’s no secret that the bull market is now nearing its ninth year. It’s also no secret that the major stock market indexes are up at all-time highs. Still, it is a market of stocks, and not all stocks are surging to all-time highs. And some stocks might even have risen handily above their fair value.

24/7 Wall St. reviews dozens of analyst research reports each day of the week in an effort to find new investing and trading ideas for our readers. Some of these analyst reports cover stocks to buy. Others cover stocks to sell or stocks to avoid. Those sell-ratings come with labels such as Sell, Underperform, Underweight, Negative and Reduce.

We have noticed a higher number of sell-related analyst calls so far this week than we are used to seeing. Maybe this is not a reason to sell stocks in general, but the analysts have concerns about each of these companies. Some of the sell-equivalent ratings are also from larger firms and well-known analysts. Many analysts and brokers tell their clients to buy stocks all the time, but many investors have a harder time getting to hear when it’s time to sell a stock.

Consensus analyst price target data and valuation metrics are from the Thomson Reuters sell-side research service. Additional color and commentary has been added on most of these daily analyst calls. These were 11 stocks given Sell and their equivalent ratings on November 6 and November 7 of 2017.

Apache Corp. (NYSE: APA) was reiterated as Underperform, along with a $38 price target, at Jefferies on November 6. This compares with a recent share price of $45.50, but Jefferies said the company’s tone on its post-earnings call implied a more measured approach that has it modeling for a lower level of spending next year.

Apache shares have a 52-week trading range of $38.14 to $69.00, and the consensus analyst target price is $47.85. The lowest listed target price is still down at $26.

Essex Property Trust (NYSE: ESS) was downgraded to Underperform from Neutral at Mizuho on November 6. The price target of $250 is not exactly a panic level, considering a pre-call price of $253.98.

This apartment REIT has a 52-week range of $208.92 to $270.04, and its consensus analyst target of $268.00 does not imply that much upside ahead.

Exxon Mobil Corp. (NYSE: XOM) was a part of a downgrade at HSBC, wherein the firm cut a Hold rating to Reduce. The firm also cut its target to $77 from $81.50 in the call, noting that Exxon’s cash flows are lagging that of rival Royal Dutch Shell — close to the same cash flow but, with Shell worth much less in market cap.

Exxon Mobil shares were down just 0.4% at $83.39 late on Tuesday, and the consensus target price was $83.93 before the call. The 52-week range is $76.05 to $93.22.

Frank’s International N.V. (NYSE: FI) was downgraded to Underperform from an already cautious Neutral rating at Credit Suisse on November 7. The engineered tubular services provider for the oil and gas industries saw its price target slashed to $4 from $8, versus a prior close of $7.31. Credit Suisse slashed estimates and said that it sees no support for the valuation here.

Frank’s has a 52-week range of $6.04 to $13.57, and its consensus target price was $8.14 before the “sell-equivalent” downgrade.

Goldman Sachs Group Inc. (NYSE: GS) was downgraded to Sell at a firm called Vertical Group on November 6. This is from analyst Dick Bove, and he thinks that more earnings issues may surface here. The shares were at $244.40 last Friday ahead of the call, and they were down at $243.49 on Monday and down again at $240.80 on Tuesday.

Goldman Sachs has a 52-week range of $178.46 to $255.15 and the consensus analyst target is $247.84.

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Hyster-Yale Materials Handling Inc. (NYSE: HY) has had a hard week after earnings. A firm called Seaport Global lowered its rating to Sell from Neutral with a $75 price target. The prior close was at $90.01, before the November 6 downgrade, but this stock was down at $81.07 late on Tuesday.

The lift trucks and aftermarket parts company had a $1.33 billion market cap on last look, and even the consensus target price is down at $77.00. Hyster-Yale’s 52-week trading range is $53.50 to $93.90.

ON Semiconductor Corp. (NASDAQ: ON) did not really react to the call, but Credit Suisse maintained its Underperform rating. Still, the firm raised its target to $17.00 from $14.50, which was still about $4.41 lower than the prior day’s closing price. The firm’s Pitzer referred to the earnings as solid but said there was less upside than expected.

This may sound like less of a “Sell” than it was, but the consensus price target was last seen at $20.68, and the 52-week range of $10.84 to $22.03.

PTC Inc. (NASDAQ: PTC) was started as Underperform and assigned a $60 price objective at Merrill Lynch on November 6. The prior closing price was $66.25, so maybe 10% downside doesn’t sound so crazy when you consider that the consensus target price is $66.85.

This $7.5 billion software player has a 52-week trading range of $44.82 to $67.12.

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Sprint Corp. (NYSE: S) has been a disaster since its merger with T-Mobile imploded. Sprint is the big loser here because the wireless telecom carrier is the most stretched financially. Jefferies reiterated its Sell rating and cut its target to $4.50 from $5.50 on November 7, and KeyBanc Capital Markets downgraded Sprint to Underweight from Sector Weight on November 6.

Sprint shares were at $6.67 last Friday and fell to $5.90 on Monday after the first downgrade and after the merger was killed. Its stock was down another 2.6% more at $5.75 on Tuesday afternoon, and its 52-week range is $5.72 to $9.65.

Veritone Inc. (NASDAQ: VERI) was down over 15% at $31.05 on Tuesday after reporting earnings the prior day. It was downgraded to Sell from Buy with a $15 price target at FBR Capital Markets on November 7. Veritone’s loss from operations in the third quarter was $19.5 million (up $13.5 million from a year ago) due primarily to the $11.6 million increase in stock-based compensation expenses. Meanwhile, net revenues increased 60% to $3.7 million in the third quarter from $2.3 million in the same period in 2016.

Veritone’s stock is highly volatile, as seen by the 52-week range of $7.76 to $74.92 per share.

Ultimate Software Group Inc. (NASDAQ: ULTI) was effectively called “not so ultimate” at Merrill Lynch on November 6. The firm started coverage as Underperform and assigned a $187 price objective, The prior close was $206.78, but the stock was down at $196.04 late on Tuesday. Its 52-week range is $180.29 to $233.42.

The company provides cloud-based human capital management solutions, and it had a market cap of $6 billion before the cautious call. Its consensus analyst target is up at $224.45.

Tuesday’s top analyst upgrades and downgrades included Altice USA, CVS Health, Exxon, Lowe’s, T-Mobile, Sprint, Under Armour and many more.