Schaeffer's Trading Floor Blog

Analyst Downgrades: Netflix, Inc. (NFLX), Target Corporation (TGT), and Crocs, Inc. (CROX)

Analysts downwardly revised their ratings on NFLX, TGT, and CROX

by 8/8/2013 9:29 AM
Stocks quoted in this article:

Analysts are weighing in today on streaming video service Netflix, Inc. (NASDAQ:NFLX), retailer Target Corporation (NYSE:TGT), and footwear manufacturer Crocs, Inc. (NASDAQ:CROX). Here's a quick roundup of today's bearish brokerage notes.

  • Baird initiated a "neutral" rating for NFLX, which closed at $249.21 yesterday. Technically speaking, NFLX has had a momentous year, tacking on a jaw-dropping 331% year-over-year. Moreover, the stock has outperformed the broader S&P 500 Index (SPX) by 14.5 percentage points during the past two months. Still, analysts elsewhere are skeptical, as well. Specifically, NFLX sports 17 "holds" and four "sell" or worse ratings, compared to just five "strong buy" recommendations. Likewise, the stock's consensus price target of $229.33 represents territory last breached on July 8. Given NFLX's technical stamina, this leaves the door wide open for a potential round of upgrades and/or price-target hikes, which could serve as a contrarian tailwind for Netflix, Inc.

  • While TGT boasts a year-to-date gain of 21%, the stock has done little to advance in the past three months, stepping up a mere 1.6% to its current trading level at $71.68. With that being said, J.P. Morgan Securities lowered its rating for TGT to "neutral" from "overweight" this morning. Meanwhile, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than five puts for every call within the last two weeks. The resultant 10-day put/call volume ratio of 5.16 ranks higher than 80% of other such readings taken over the past year, indicating Target Corporation's puts are being picked up over calls at a faster-than-usual clip.

  • Sterne Agee slashed its rating for CROX to "underperform" from "neutral" ahead of today's opening bell. On the charts, CROX has shaved off 16% on a year-over-year basis. What's more, the stock took a 17.9% dip in the past month alone, and was last seen hovering around $14.01. Regardless, CROX's Schaeffer's put/call open interest ratio (SOIR) sits at 0.54, with calls nearly doubling puts among options expiring in three months or less. This ratio ranks in the 28th percentile of its annual range, conveying Crocs, Inc.'s short-term speculators are more call-heavy than usual right now.

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