Schaeffer's Trading Floor Blog

Analyst Downgrades: Electronic Arts Inc., NetEase, Inc (ADR), and Express, Inc.

Analysts downwardly revised their ratings on EA, NTES, and EXPR

by 3/13/2014 9:39 AM
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Analysts are weighing in today on video game maker Electronic Arts Inc. (NASDAQ:EA), Internet technology firm NetEase, Inc (ADR) (NASDAQ:NTES), and specialty apparel retailer Express, Inc. (NYSE:EXPR). Here's a quick roundup of today's bearish brokerage notes.

  • Despite EA's recent accomplishments on and off the charts (the stock has been flying to higher highs on an upbeat video game sales forecast), BofA-Merrill Lynch downgraded the equity to "neutral" from "buy" this morning. Baird, on the other hand, upped its price target to $33 from $25. Elsewhere, put players are packing the heat on Electronic Arts Inc., as the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 2.78 ranks in the 88th annual percentile. In other words, puts have been bought to open over calls at a faster-than-usual rate during the past two weeks. Stepping back, Electronic Arts Inc. has had a momentous start to 2014, climbing 28.9% to perch at $29.54 -- in territory not explored since October 2008.

  • Credit Suisse initiated a "neutral" rating and a $76 price target on NTES earlier today, as the stock has plunged 13.7% year-to-date to trade at $67.76. Activity in the stock's options pits, meanwhile, is particularly put-heavy among short-term speculators of late. This is evidenced by the fact that NetEase, Inc's Schaeffer's put/call open interest ratio (SOIR) of 1.27 ranks 6 percentage points from a 12-month peak.

  • EXPR dropped 12% in yesterday's session to close at $16.05, after the company gave a dismal fourth-quarter earnings report, plus weak first-quarter and yearly forecasts. Subsequently, the stock received a round of bearish brokerage notes, which included a downgrade to "market perform" from "outperform" at FBR, and a price-target cut to $20 from $26 at BMO. Meanwhile, in the options pits, Express, Inc. maintains a SOIR of 0.53, which ranks in the 19th annual percentile. This means short-term option traders are more call-focused than usual right now.

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