Schaeffer's Trading Floor Blog

Analyst Downgrades: First Solar, Inc. (FSLR), Zillow Inc (Z), and CVS Caremark Corporation

Analysts downwardly revised their ratings on FSLR, Z, and CVS

by 8/7/2013 9:33 AM
Stocks quoted in this article:

Analysts are weighing in today on alternate energy concern First Solar, Inc. (NASDAQ:FSLR), real estate website Zillow Inc (NASDAQ:Z), and drugstore chain CVS Caremark Corporation (NYSE:CVS). Here's a quick roundup of today's bearish brokerage notes.

  • Following yesterday's disappointing earnings report, FSLR saw its price target slashed to $31 from $35 at Northland in pre-market. So far in 2013, FSLR has advanced more than 51% to its current trading level at $46.75. Therefore, it comes as no surprise that calls have been the options of choice of late. Specifically, FSLR sports a Schaeffer's put/call open interest ratio (SOIR) of 0.77, with calls outnumbering puts by almost 4-to-3 among options expiring in three months or less. This ratio ranks just 9 percentage points from its annual low, indicating First Solar, Inc.'s short-term speculators have rarely been more call-heavy throughout the past year.

  • RBC lowered its rating for Z to "sector perform" from "outperform," after last evening's weaker-than-expected earnings report. (On the other hand, Z saw its price target hiked at both RBC and Benchmark.) Technically speaking, Z has gained a whopping 227% year-to-date, and was last seen hovering around $90.71. What's more, the stock has outperformed the broader S&P 500 Index (SPX) by 67 percentage points during the past two months. Still, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open six Z puts for every five calls within the last 10 weeks. The resulting 50-day put/call volume ratio of 1.19 ranks higher than 65% of other such annual readings, conveying Zillow Inc's puts are being picked up over calls at a slightly faster-than-usual clip.

  • Finally, Cantor Fitzgerald sliced its rating for CVS to "hold" from "buy" this morning, despite yesterday's upbeat earnings report. The firm also reduced its price target by $3 to $62. On the charts, CVS has tacked on 33.8% over the past year. On top of that, the stock reached a new all-time high of $62.36 on July 23, before dropping to its current perch at $59.89. With that being said, analysts elsewhere remain optimistic toward CVS, which boasts 14 "buy" or better endorsements, compared to just one "hold" and not a single "sell" suggestion. Likewise, analysts' consensus price target of $65.53 represents uncharted territory for CVS Caremark Corporation.

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