Schaeffer's Trading Floor Blog

Analyst Downgrades: JetBlue Airways, Exxon Mobil, and Yum! Brands

Analysts downwardly revised their ratings on JBLU, XOM, and YUM

by 1/30/2013 9:08 AM
Stocks quoted in this article:

Analysts are weighing in today on passenger airline JetBlue Airways Corporation (NASDAQ:JBLU - 6.07), gas & oil concern Exxon Mobil Corporation (NYSE:XOM - 91.76), and quick-service restaurateur Yum! Brands, Inc. (NYSE:YUM - 64.24). Here's a quick roundup of today's bearish brokerage notes.

  • After reporting weaker-than-expected quarterly earnings on Tuesday, JBLU was downgraded to "underperform" from "market perform" at Raymond James this morning. The stock has advanced more than 6% in 2013, yet bearish speculation continues to flourish on JBLU. Short interest climbed by nearly 4% during the most recent reporting period, and now these bearish bets account for roughly 18% of the equity's available float. In fact, it would take close to 12 days to unwind these shorted shares, at the stock's average daily trading volume.

  • As XOM prepares to report fourth-quarter earnings before the open on Friday, the stock was cut to "neutral" from "outperform" at Macquarie today. The equity currently sports a gain of about 6% so far this year, yet puts have nearly doubled calls during the past two weeks, as evidenced by XOM's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 2.06. This ratio ranks higher than 89% of similar annual readings, reflecting a healthier-than-usual appetite for puts over calls lately.

  • Finally, YUM was reduced to "market perform" from "outperform" at Bernstein in pre-market activity -- a move that could exacerbate the security's year-to-date decline of more than 3%. Meanwhile, sentiment among the short-term options crowd is bearishly biased. YUM's Schaeffer's put/call open interest ratio (SOIR) stands at 1.41, with calls easily outpacing puts among the front three-months' series of options. This ratio arrives in the 73rd percentile of its annual range, signaling near-term traders are more put-heavy toward the stock than usual.

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