Wall Street Analysts

4 Stocks Top-Rated, Wall Street Analysts Feel Investors Should Avoid in 2017

Wall Street Analysts

While it’s important for investors to be aware of what stocks they should consider buying, it’s just as important to know which ones should be avoided. Here are four stocks top-performing analysts from Wall Street feel investors should stay away from in 2017.

Campbell Soup Company

Campbell Soup Company (CPB) operates in the food industry and is best known for their canned soups and various other related products. However, due to an increase in competition, the company struggled in 2016 in regards to the sale of their soups.

Therefore, the company felt the need to lower their guidance on earnings and sales for the 2017 financial year. The company is expecting their Q2 2017 results will be poorer than they had initially predicted and the rest of the year will continue to show the same weakness.

Campbell Soup is planning to reorganize their reporting so that they no longer report by geography or brand group, thus switching to a product category instead. This move is part of their effort to improve organizational structure and of their critical growth strategies. From now on, the segments will be dubbed Global Biscuits and Snacks, Packaged Fresh and America’s Simple Meal and Beverages.

Campbell Soup has received ratings from 3 top analysts over the last three months. Of these, 2 ratings are bearish, while one rating is neutral. This makes the consensus from top analysts a rating of strong sell.

David Driscoll, a four-start analyst from Citigroup, explained that he is guarded when it comes to the food industry and is not expecting sales figures to show improvement in the near future. Campbell Soup has a valuation of $14.95 billion at the moment.

CBOE Holdings, Inc

CBOE Holdings (CBOE) is the CBOE Futures Exchange and the Chicago Board Options Exchange (CBOE) holding company. It also holds a number of other subsidiaries. CBOE reported relatively acceptable earnings for Q4 2016, but they just missed estimates put forward by analysts.

However, experts feel the company will be hard-pressed to achieve guidance for 2017 because of an unpredictable market that has generated poor results for quite a while. Higher competition and low traction in terms of VIX futures are other reasons that have been cited.

Four top-rated analysts have covered the stock over the past three months. Of these, two have issued ratings of bearish, while two issued ratings of neutral, which means that the consensus rating is moderate sell.

Andrew Blostein, a four-star analyst from Goldman Sachs, recently rated the company a sell. He explained that the company’s critical growth products have gained a more cyclical nature and are more dependent on VIX. This means slower growth in terms of volumes because VIX tends to be subdued when the economy is expanding. At the moment, CBOE Holdings has a valuation of $5.23 billion.

Exxon Mobil Corporation

Exxon Mobil Corporation (XOM) operates in the oil and gas industry. Like many other oil and gas companies, the company has been experiencing difficulty due to the significant decline of oil prices towards the close of 2016, based on weakened demand and a dollar that is growing stronger.

Despite the fact that oil prices are starting to rally, oil stocks still haven’t seen any growth in sales, which makes Exxon a poor choice for investors.

Exxon has been rated by 5 top analysts over the last three months. Of these, 3 ratings were bearish, while 2 ratings were neutral. Thus, the consensus from top-performing analysts is a rating of moderate sell for the company.

Edward Westlake, a 4-star analysts from Credit Suisse, recently covered Exxon. He revised his rating to a sell, explaining that the company’s target was a modest growth in volumes from 4 million barrels per day to 4.3 million barrels per day by 2017 and certain investments still had to deliver a payoff, which would appear later on. Asset sales were also cited as a reason for the downgrade as well as the company’s cash neutral oil price, which is set to decline.

Exxon Mobil currently has a valuation of $388.05 billion.

Verisign, Inc.

Verisign (VRSN) operates an extensive range of network infrastructures. Recently, the company posted their financial results for Q4 FY 2016, which revealed Verisign experienced a significant drop in profits mainly because of taxes. Thus, Verisign posted a profit of $65.5 million, compared to the $292.1 million the company posted a year prior.

This decline in profit was because the rate of domain renewal declined to 72 percent, from the 72.7 percent the company reported last year. Additionally, the company’s plans of 700,000 new registered domain didn’t pan out as they only achieved 590,000.

Over the past three months, only one top-performing analysts issued a rating for Verisign, which was bearish. Thus, the consensus is strong sell.

Phillip Winslow, a four-star analyst from Credit Suisse, issued a rating of sell for Verisign on the 26th of January, stating that the risk-to-reward ratio for the company’s share price is biased towards a decline due to the short-term risk associated with growth of domain names, and expectations of a weak operation profit as well as poor growth of earnings per share based on current valuation.

The company has a valuation of $7.31 billion at the moment.


About

Eric Hanson covers Software and Computer Analytics companies within the Business Services group. Eric was named by Forbes in June 2013 as one of the best brokerage analysts in the Consumer Discretionary sector.


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