After Billabong reduced their profit forecasts and announced plans to sell more shares to “pay down debt” the analysts apparently turned on the company. According to a story on Bloomberg at least four brokers have cut the stock to their lowest rankings:
The stock’s rating was cut to “sell” by Royal Bank of Scotland Group Plc, “underweight” by JPMorgan Chase & Co., and “underperform” by both Macquarie Group Ltd. and Credit Suisse. . . “The old Billabong story was a seductive growth story as surf fashion took market share in the urban and street apparel segments,” Greg Dring, a Sydney-based Macquarie analyst, said in a note to clients today. “The new Billabong story seems to center on customers that are increasingly short-term focused and are reluctant to order for the future.” Dring cut earnings estimates in 2010 by 23 percent.
But we still haven’t really figured out the whole analysts game.
[Link: Bloomberg.com]
