Schaeffer's Trading Floor Blog

Analyst Downgrades: Lululemon Athletica inc., Valero Energy Corporation, and Chevron Corporation

Analysts downwardly revised their ratings on LULU, VLO, and CVX

by 12/13/2013 9:12 AM
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Analysts are weighing in today on yoga-wear retailer Lululemon Athletica inc. (NASDAQ:LULU), along with energy concerns Valero Energy Corporation (NYSE:VLO) and Chevron Corporation (NYSE:CVX). Here's a quick roundup of today's bearish brokerage notes.

  • LULU has been slapped with multiple negative analyst notes, following yesterday morning's weak fourth-quarter forecast. This morning, Janney slashed its price target by $14 to $76, while Credit Suisse downgraded the equity to "neutral" from "outperform." Likewise, Mizuho, Wedbush, KeyBanc, Canaccord Genuity, and Stifel all lowered their respective price targets, too. Meanwhile, LULU shares plunged 11.7% Thursday to trade at $60.39 following the quarterly announcement. Elsewhere, short interest accounts for nearly 14% of Lululemon Athletica inc.'s available float, which represents close to 12 sessions' worth of pent-up buying demand.

  • Credit Suisse reinstated its "neutral" rating on VLO, which has gained 54% year-over-year to perch at $45.88. Meanwhile, in the options pits, the equity has racked up a Schaeffer's put/call open interest ratio (SOIR) of 1.26, which sits 10 percentage points from an annual high. In other words, short-term option traders have rarely been more put-heavy toward Valero Energy Corporation during the past 12 months.

  • Finally, RBC initiated coverage on CVX with a "sector perform" rating ahead of today's opening bell. In 2013, Chevron Corporation has gained almost 12% to trade at $120.99. Meanwhile, option traders have bought to open CVX calls over puts at a rapid-fire pace during the past two weeks. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.56 ranks higher than 99% of similar readings from the past year, showing option traders' preference for CVX calls over puts is at a near-annual high.

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