Schaeffer's Trading Floor Blog

Analyst Downgrades: Bank of America Corp, MasterCard Inc, and NetSuite Inc

Analysts downwardly revised their ratings on BAC, MA, and N

by 4/29/2014 9:39 AM
Stocks quoted in this article:

Analysts are weighing in today on financial kingpin Bank of America Corp (NYSE:BAC), credit card issuer MasterCard Inc (NYSE:MA), and cloud-based software provider NetSuite Inc (NYSE:N). Here's a quick roundup of today's bearish brokerage notes.

  • KBW and Bernstein each slashed their price targets on BAC to $17 from $18.50 and $18, respectively, in pre-market trading, after the financial firm announced the suspension of its buyback program. While Bank of America Corp has lost 11.4% over the past month to trade at $15.04, its short-term options traders have been particularly call-focused. This is evidenced by the fact that the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.62 ranks lower than 81% of comparable readings from the past year. A continuation of BAC's downward trajectory may lead to a capitulation of bullish bettors, which could create additional pressure on the shares.

  • MA -- which is down 14.2% year-to-date to trade at $71.63 -- received a price-target cut to $90 from $91 at Stifel this morning. While the company prepares for its turn in the earnings confessional ahead of Thursday's opening bell, the stock has seen heavier-than-usual call open interest (relative to put open interest) among options expiring within the next three months. In fact, MasterCard Inc's SOIR of 1.03 ranks near the bottom quartile of its annual range. Like BAC, MA could face additional technical headwinds, should its bullish bettors start hitting the exits.

  • N's first-quarter earnings report from last night was poorly received among the brokerage crowd. This morning, the stock received a bundle of bearish analyst notes, including a $20 price-target decrease to $101 at JMP Securities, and a $10 price-target cut to $125 at Credit Suisse. Meanwhile, in the options pits, NetSuite Inc -- which has plunged 28.4% so far this year to trade at $71.26 -- sports a SOIR of 0.31, which ranks lower than 99% of all other comparable readings taken during the past 12 months. In other words, short-term option traders are more call-heavy now toward N than they have been at any other time during the past year.

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