Schaeffer's Trading Floor Blog

Analyst Downgrades: Monster Beverage Corp, NXP Semiconductors NV, and GameStop Corp.

Analysts issued bearish notes on MNST, NXPI, and GME

by 8/18/2014 9:24 AM
Stocks quoted in this article:

Analysts are downwardly revising their ratings today on drink maker Monster Beverage Corp (NASDAQ:MNST), Netherlands-based NXP Semiconductors NV (NASDAQ:NXPI), and video game retailer GameStop Corp. (NYSE:GME). Here's a quick look at today's bearish brokerage notes on MNST, NXPI, and GME.

  • MNST is poised for a breather, after last week's bull gap inspired by The Coca-Cola Company's (NYSE:KO) fresh stake. In fact, Monster Beverage Corp's 14-day Relative Strength Index (RSI) soared to 87 -- well into overbought territory -- suggesting a short-term pullback may have been in the cards. Not helping matters, though, is a downgrade to "hold" from "buy" at Jefferies, though the brokerage firm also hiked its price target on MNST to $95 from $80. The stock closed last week at $93.49, after notching an all-time high of $94.93 in Friday's session.

  • Goldman Sachs downgraded NXPI to "sell," marking a relatively rare negative note for the semiconductor concern. In fact, NXPI boasts 10 "strong buys" and one "buy" endorsement, compared to one "hold" and not a single "sell" recommendation (until now). Elsewhere, options traders are also turning skeptical. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.47 stands higher than 78% of all other readings from the past year. In other words, option buyers have picked up NXPI puts over calls at a faster-than-usual clip during the past two weeks. NXP Semiconductors NV finished at $63.89 on Friday.

  • Ahead of its turn in the earnings spotlight Thursday night, GME was slapped with a price-target cut to $33 from $34.71 at Benchmark. The stock is off 19.5% year-to-date, and short-term option players have rarely been more put-heavy during the past year. In fact, GameStop Corp.'s Schaeffer's put/call open interest ratio (SOIR) of 3.72 sits just 4 percentage points from an annual peak. However, should the company unveil disappointing earnings later this week, more bearish brokerage attention could follow. Right now, 11 out of 15 analysts offer up "buy" or better ratings. GME finished last week at $39.64.

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