Schaeffer's Trading Floor Blog
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Analysts are weighing in today on computer giant International Business Machines Corp. (NYSE:IBM), construction equipment manufacturer Deere & Company (NYSE:DE) and apparel retailer American Eagle Outfitters (NYSE:AEO). Here's a quick roundup of today's bearish brokerage notes.

  • IBM -- which is off roughly 2% on a year-over-year basis to hover at $195.50 -- was downgraded to "underperform" from "neutral" at Credit Suisse ahead of the open. However, despite the stock's technical troubles, there are still a number of holdouts among the analyst crowd, as 10 out of 21 brokerage firms have deemed International Business Machine Corp. worthy of a "buy" or better endorsement. This leaves plenty of room for further downgrades, which could pressure the shares lower. Also of note, short interest accounts for less than 2% of the stock's float, pointing to a meager amount of sideline cash. In other words, the security isn't likely to benefit much from future short-covering activity.

  • Down more than 4% so far this year to linger in the $82.80 neighborhood, DE was cut to "underperform" from "market perform" at William Blair this morning. Meanwhile, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.02 for Deere & Company, indicating puts bought to open have slightly outnumbered calls during the past two weeks. This ratio ranks in the 62nd percentile of its annual range, signaling traders have been picking up bearish options over bullish at an accelerated clip lately. The firm is slated to report quarterly earnings ahead of the open on Aug. 14.

  • AEO was on the bearish radar today, after the retailer slashed its second-quarter earnings outlook. Brean Capital lowered the stock to "hold" from "buy," while brokerage firms including Jefferies, Wedbush Securities, Susquehanna, and Stifel Nicolaus handed out downgrades and/or price-target cuts. American Eagle Outfitters has shed close to 3% in 2013 and is priced at $19.97, so it's not surprising that puts are preferred over calls in the short-term options pits. In fact, American Eagle Outfitters' Schaeffer's put/call open interest ratio (SOIR) of 0.97 is just 12 percentage points shy of a 12-month peak, meaning near-term traders have rarely been more put-heavy toward the stock during the past year. AEO will step into the earnings confessional before the market opens on Aug. 21.

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