Schaeffer's Trading Floor Blog

Analyst Downgrades: Expedia Inc (EXPE), Microsoft Corporation (MSFT), and Whole Foods Market, Inc.

Analysts downwardly revised their ratings on EXPE, MSFT, and WFM

by 7/29/2013 9:22 AM
Stocks quoted in this article:

Analysts are weighing in today on online travel company Expedia Inc (NASDAQ:EXPE), software issuer Microsoft Corporation (NASDAQ:MSFT), and health foods grocer Whole Foods Market, Inc. (NASDAQ:WFM). Here's a quick roundup of today's bearish brokerage notes.

  • After announcing lower-than-expected earnings on Thursday, EXPE sank to a new annual low of $47.09, spurring a round of downgrades and/or price-target cuts among the brokerage bunch. Following this trend, Lazard sliced its rating for EXPE to "neutral" from "buy" ahead of today's opening bell. Overall, EXPE has dropped 29.2% over the last six months to trade at $47.20, and has underwhelmed the broader S&P 500 Index (SPX) by more than 25 percentage points during the past month. With that being said, EXPE sports an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day put/call volume ratio of 0.66, which ranks in the 64th percentile of its annual range. In other words, Expedia Inc's speculators have bought to open puts over calls at an elevated pace within the last two weeks.

  • MSFT saw its rating lowered to "neutral" from "overweight" at Atlantic Equities this morning, ahead of the firm's annual report from CEO Steve Ballmer. Technically speaking, MSFT has advanced 18.4% since the beginning of 2013. What's more, the stock claimed a new multi-year high of $36.43 on July 16, before slumping to its current perch at $31.62. In such a light, MSFT boasts a Schaeffer's put/call volume ratio (SOIR) of 0.62, with calls outnumbering puts by roughly 3-to-2 among options expiring in three months or less. This ratio ranks higher than just 33% of other such readings taken throughout the year, suggesting Microsoft Corporation's short-term speculators are more call-heavy than usual right now.

  • Finally, Cantor slashed its rating for WFM to "hold" from "buy" ahead of the company's turn in the earnings confessional on Wednesday. On the charts, WFM has climbed 22.8% year-to-date, and has outshined the broader SPX by roughly 17 percentage points during the past three months. Not to mention, the stock reached a new all-time high of $56.83 earlier this month, and is now lingering at the $55.97 level. Regardless, WFM's SOIR comes in at 1.29, with puts outnumbering calls among options with a shelf-life of three months or less. This ratio ranks just 4 percentage points from a 12-month high, indicating Whole Foods Market, Inc.'s short-term speculators are picking up puts over calls at a near annual-high rate.

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