Schaeffer's Trading Floor Blog

Analyst Downgrades: NetApp, Western Digital, and Monster Beverage

Analysts downwardly revised their ratings on NTAP, WDC, and MNST

by 10/23/2012 9:22 AM
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Analysts are weighing in today on data storage providers NetApp Inc. (NASDAQ:NTAP - 29.90) and Western Digital Corp. (NASDAQ:WDC - 35.28), along with energy drink giant Monster Beverage Corp (NASDAQ:MNST - 45.73). Here's a quick roundup of today's bearish brokerage notes.

  • NTAP -- which has surrendered roughly 24% during the past year -- was downgraded to "neutral" from "outperform" and saw its price target lowered to $30 from $40 at Baird this morning. Nevertheless, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 1.87, indicating calls bought to open have nearly doubled puts during the past few months. This ratio is docked in the 61st percentile of its annual range, suggesting speculators have been scooping up calls over puts at an accelerated clip.

  • Down about 8% in pre-market action, WDC was hammered with bearish attention today, after issuing quarterly guidance that fell below analysts' expectations. Specifically, BMO slashed its price target to $34 from $43, while Barclays, Baird, J.P. Morgan, Evercore Partners, Needham, and FBN Securities also downwardly revised their respective price targets. Although the equity has gained more than 29% on a year-over-year basis, skeptics have been zeroing in on WDC lately. In fact, short interest on the stock jumped by more than 29% during the past month, and now accounts for 3% of the security's float.

  • MNST was cut to "buy" from "conviction buy" at Goldman Sachs ahead of the open, after news hit the Street that several deaths may be linked to the company's popular energy drinks. The stock has shed nearly 46% since hitting its year-to-date high of $83.96 on April 30, which may be attracting short-term pessimists. In fact, the equity's Schaeffer's put/call open interest ratio (SOIR) sits at 1.39, confirming puts outpace calls among the front three-months' series of options. This ratio ranks higher than 85% of comparable readings taken during the past year, reflecting a bearish skew in the near-term options pits.

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