Schaeffer's Trading Floor Blog

Analyst Downgrades: Groupon, NVIDIA, and Allscripts Healthcare Solutions

Analysts downwardly revised their ratings on GRPN, NVDA, and MDRX

by 11/9/2012 9:17 AM
Stocks quoted in this article:

Analysts are weighing in today on daily deals website Groupon Inc (NASDAQ:GRPN - 3.92), graphics chip maker NVIDIA Corporation (NASDAQ:NVDA - 12.68), and clinical software issue Allscripts Healthcare Solutions (NASDAQ:MDRX - 12.26). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 17% in pre-market action, GRPN was hammered with bearish attention this morning, after reporting weaker-than-expected third-quarter earnings last night. The stock was downgraded to "market perform" from "outperform" at Barrington Research, and cut to "equal weight" from "overweight" at Morgan Stanley. Meanwhile, Jefferies, Susquehanna, Benchmark, RBC, and Evercore Partners issued downward price-target adjustments. The equity has surrendered 81% so far this year, so it's no surprise that short interest accounts for a lofty 13% of GRPN's float. It would take four days to buy back these shorted shares, at the security's average daily trading volume.

  • NVDA has also been under quite a bit of pessimistic scrutiny today, after warning investors of potentially weak fourth-quarter earnings. Specifically, Canaccord Genuity slashed its price target to $16 from $20, while Nomura, Jefferies, and Oppenheimer also lowered their respective price targets. The security has shed more than 12% from the year-ago period, yet call buying is still running high on NVDA. Traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 163 calls for every 100 puts during the last four weeks, as evidenced by the stock's 20-day call/put volume ratio of 1.63.

  • MDRX revealed quarterly revenue that fell short of analysts' projections, which resulted in a downgrade to "underweight" from "neutral" at Piper Jaffray ahead of the opening bell. (Jefferies, however, raised its price target to $13 from $10.50.) The stock is down nearly 40% on a year-over-year basis, which could explain why near-term puts outnumber calls, as reflected by MDRX's Schaeffer's put/call open interest ratio (SOIR) of 1.15. In fact, this ratio is just two percentage points shy of a bearish peak, signaling short-term traders have rarely been more put-heavy toward the security during the last 12 months.

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