Schaeffer's Trading Floor Blog

Analyst Downgrades: Ford Motor Company, AT&T Inc., and Cirrus Logic, Inc.

Analysts downwardly revised their ratings on F, T, and CRUS

by 1/29/2014 9:31 AM
Stocks quoted in this article:

Analysts are weighing in today on automaker Ford Motor Company (NYSE:F), wireless services provider AT&T Inc. (NYSE:T), and integrated circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS). Here's a quick roundup of today's bearish brokerage notes.

  • F -- which shed 4.2% over the past five days to close Tuesday at $15.72 -- received two post-earnings price-target cuts this morning. In particular, Guggenheim and Sterne Agee both cut their price targets by $1 to $15 and $18, respectively. Meanwhile, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.51 shows calls roughly doubling puts among options expiring in three months or less. Furthermore, this reading is 11 percentage points from an annual low, highlighting the heavier-than-usual preference for short-term calls over puts. A continued technical underperformance by Ford Motor Company may lead to a capitulation of call players, which could subsequently push the stock further south.

  • T's cautious 2014 profit guidance led both J.P. Morgan Securities and Citigroup to slash their price targets to $35 from $38 this morning. Heading into last night's quarterly announcement, AT&T Inc. had a 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.56, ranking in the 83rd annual percentile. In other words, option traders have bought to open calls over puts on the stock -- which is down 7.2% year-to-date at $32.30 -- at an accelerated pace during the past two weeks.

  • Finally, Needham and Sterne Agee lowered their price targets for CRUS to $21 from $25, and to $22 from $24, respectively, following the company's weak third-quarter earnings report. Over the past month, Cirrus Logic, Inc. has dropped 14.7% to trade at $17.63, and the stock's SOIR of 0.84 ranks higher than 81% of comparable readings from the past year, indicating short-term option traders are more put-biased toward the equity than usual right now.

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