Schaeffer's Trading Floor Blog

Analyst Downgrades: AT&T Inc., Lululemon Athletica inc., and Peabody Energy Corporation

Analysts downwardly revised their ratings on T, LULU, and BTU

by 3/25/2014 9:25 AM
Stocks quoted in this article:

Analysts are weighing in today on telecom services provider AT&T Inc. (NYSE:T), yoga apparel maker Lululemon Athletica inc. (NASDAQ:LULU), and coal miner Peabody Energy Corporation (NYSE:BTU). Here's a quick roundup of today's bearish brokerage notes.

  • T -- which is down about 2% year-to-date to trade at $34.46 -- received a downgrade to "neutral" from "overweight," and a price-target cut to $35 from $39 at HSBC this morning. In the stock's short-term options pits, meanwhile, calls are the contracts of choice. Schaeffer's put/call open interest ratio (SOIR) for AT&T Inc. comes in at 0.58, ranking lower than all other comparable readings from the past 12 months. In other words, call open interest (relative to put open interest) is at an annual-high level among options expiring within three months. An unwinding of these bullish bets could create additional pressure on T shares.

  • LULU received more bearish brokerage attention this morning, ahead of the company's turn in the earnings confessional Thursday morning. Specifically, Canaccord Genuity and Deutsche Bank lowered their price targets to $69 from $73, and to $55 from $65, respectively. Over the past six months, Lululemon Athletica inc. has lost 32.5% to trade at $49.32, and in the options pits, the stock sports a SOIR of 1.40, which ranks in the 98th annual percentile. This means short-term LULU speculators have rarely been more put-heavy during the past 12 months.

  • BTU -- which has shed nearly 18% year-to-date to trade at $16.04 -- saw its price target drop to $19 at Jefferies this morning. In the options pits, speculators are upping the bearish ante on Peabody Energy Corporation, as well. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.41 ranks in the 67th percentile of its 12-month range, meaning puts have been bought to open, relative to calls, at a faster-than-usual rate recently.

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