Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Stock Downgrades: Zillow Is Sleepless in Seattle


Wall Street ratings agencies set the tone for today's stock market.

Rain City's Zillow (NASDAQ:Z) today endures not one but two equity analysts raining on its parade. Shares have surged a remarkable 109.48% in only 12 months, but the resultant risk:reward ratio now looks stretched. Indeed, Zillow stock now trades at a steep 48 times 2015 EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization).
Having journeyed from PIIGS to sausages, this meat market has indeed come a long way. The problems on Europe's periphery are apparently now nothing but a bad dream after continental exchanges advanced for a seventh straight week. And here at home, both the Dow (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) ended the month of May at fresh bests having feasted on a carnivorous food fight. Hillshire Brands (NYSE:HSH), purveyor of both Ball Park hot dogs and Polish kielbasa, has now risen a remarkable 47.06% in only five trading sessions following a bidding war for its services. In this, the week we mark the 70th anniversary of D-Day, it bears reminding that the greatest victories always contain the seeds of future defeat. Recent headlines in the Wall Street Journal, from "Penny Stocks Fueling Big-Dollar Dreams" to "Borrowers Tap Their Homes at a Hot Clip," point to trouble ahead in the not-too-distant future. For now, all is calm, and with Memorial Day marking the unofficial start of the season, investors enjoyed an Indian summer. Market-friendly election results saw India's benchmark bourse (S&P BSE Sensex (INDEXBOM:SENSEX)) advance almost 8% in May. Pepsi (NYSE:PEP), led by prodigal daughter Indra K. Nooyi, scaled a historic high. And Twitter (NYSE:TWTR) CFO Mike Gupta can count his riches after an analyst upgrade inspired that stock to a 6.4% surge. The micro-blogging bluebird truly was the bee's knees and, speaking of bees, an Indian-American has now won our National Spelling Bee for an astonishing 13th time in the past 17 attempts.
Today in economics, April construction spending and May's Institute for Supply Management manufacturing index are each out at 10:00 a.m. EDT. On the earnings front, Conn's Inc. (NASDAQ:CONN), Krispy Kreme (NYSE:KKD), and Quiksilver (NYSE:ZQK) all release quarterly results.
Now let's look at this morning's rating reductions, an eclectic bunch that features a beleaguered French bank and Swedish car company, plus headline stock Zillow.

Big Lots (NYSE:BIG): Shares get downgraded to Equal Weight from Overweight by Barclays.
BNP Paribas (OTCMKTS:BNPQY): The troubled Paris-based financial firm is falling further in today's European trading. This, after being pulled from the Pan-Europe Conviction Buy List at Goldman Sachs, which warns that "a potentially meaningful financial penalty in the US curtails the outlook for capital return."
Express Scripts (NASDAQ:ESRX): Cowen cuts the company to Perform from Outperform. Its target price, previously $79, is trimmed by $2.
Quiksilver (NYSE:ZQK): The stock is now Neutral from Buy at B. Riley & Co.
Theravance (NASDAQ:THRX): Robert W. Baird reduces its rating to Neutral from Outperform and also takes its price objective to $21 from $31. Its concerns include sluggish Breo sales.
Universal Electronics (NASDAQ:UEIC): Shares are now Neutral from Buy at B Riley & Co.
Volvo (OTCMKTS:VOLVY): Goldman Sachs slashes the Scandinavian automotive giant to Sell from Neutral.
Xilinx (NASDAQ:XLNX): The stock gets downgraded to Neutral from Buy, again at Goldman.
Zillow: Today's headline equity gets cut to Perform from Outperform by both Pacific Crest and RBC Capital Markets, whose new price objective is $115.
Also see:

New Stock Coverage: Can 50 Cent Make Starz a Quick Buck?

Stock Upgrades: May Has Gone Away, but TripAdvisor Still Going Places
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos