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Now analysts are downgrading Kohl's KSS and Macy's M . Now they are saying you can't own Home Depot HD and Lowe's LOW . Thanks for nothing.
I think we are seeing the kinds of downgrades that are of a Captain Obvious nature.
There are two kinds.
The first is the "declare victory" calls. These include the Dunkin' Brands DNKN , Target TGT , D. R. Horton DHI and KB Home KBH downgrades we got today. These are all of the "they are up too much, so I am out of here" variety, and I can't blame anyone for wanting to ring the register. Sometimes, though, it is worth it to play out the groups and simply say that "they are momentarily ahead of themselves," because they have run a lot but the fundamentals are very much improved.
Then, there are the Macy's and Kohl's downgrades. These are the kinds of valueless downgrades that explain the obvious: "I know they are down, but they aren't coming back." And this is something that I hesitate to think you can make a judgment on in July, the least important month of the fiscal year.
All of these downgrades have impact, but I think they shouldn't. Obvious downgrades of stocks that are already down don't help. I want them to get me out ahead of the declines.
And these 52-week-high cuts? If the stories are good ones, perhaps we have to recognize that they aren't going to quit; they can refuel.
Analysts have made very few calls to remember during this period. It's been an undistinguished period for the analyst community. There is no sign it is ending any time soon.
