Schaeffer's Trading Floor Blog

Analyst Downgrades: Sodastream International Ltd, The Kroger Co., and Target Corporation

Analysts downwardly revised their ratings on SODA, KR, and TGT

by 7/12/2013 9:21 AM
Stocks quoted in this article:

Analysts are weighing in today on home beverage maker Sodastream International Ltd (NASDAQ:SODA), grocery store chain The Kroger Co. (NYSE:KR), and broadline retailer Target Corporation (NYSE:TGT). Here's a quick roundup of today's bearish brokerage notes.

  • Despite a year-over-year gain of nearly 69% to trade at $62.52, SODA was downgraded to "perform" from "outperform" at Oppenheimer this morning. This pessimistic attitude toward the stock goes beyond the brokerage bunch, as short interest on Sodastream International Ltd climbed by 4.3% during the most recent reporting period. These bearish bets now make up a formidable 35% of the security's available float -- or the equivalent of more than a week's worth of pent-up buying demand, at SODA's average pace of trading. Should the equity continue along its upward trajectory, it could spark a short-covering rally in the near term.

  • KR -- which has surged about 72% during the past year to wink at the $37.79 level -- was cut to "sell" from "neutral" at Goldman Sachs in pre-market action -- a contrast to Wednesday's analyst attention. However, sentiment toward The Kroger Co. is more upbeat in the short-term options pits. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.60, indicating calls easily outpace puts among the front three-months' series of options. This ratio is docked in the 17th percentile of its annual range, signaling near-term speculators have rarely been more call-heavy toward the security during the course of the past 12 months.

  • Up roughly 23% in 2013 to explore the $72.57 area, TGT was reduced to "hold" from "buy" at Deutsche Bank ahead of the opening bell. 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 22.43 for Target Corporation, confirming traders have bought to open more than 22 puts for every call during the past two weeks. In fact, this ratio is just 1 percentage point shy of a 52-week peak, conveying speculators have been snapping up bearish options over bullish at a near annual-high clip lately.

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