Schaeffer's Trading Floor Blog

Analyst Downgrades: Under Armour, Teva Pharmaceutical, and United States Steel

Analysts downwardly revised their ratings on UA, TEVA, and X

by 12/12/2012 9:15 AM
Stocks quoted in this article:

Analysts are weighing in today on sports apparel designer Under Armour Inc (NYSE:UA - 51.31), drug maker Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA - 41.67), and iron and steel producer United States Steel Corporation (NYSE:X - 22.41). Here's a quick roundup of today's bearish brokerage notes.

  • Off more than 1% in pre-market action, UA was initiated with an "underweight" recommendation at J.P. Morgan this morning, along with a price target of $45. The security has advanced nearly 43% so far this year, but that hasn't deterred the skeptics from converging on UA. Short interest currently represents nearly 16% of the equity's available float. It would take nearly nine sessions to buy back these shorted shares, at the stock's average daily trading volume.

  • TEVA -- which has gained just 3% year-to-date -- was downgraded to "market perform" from "outperform" at Leerink Swann today, while RBC lowered its price target to $48 from $52. Elsewhere, calls appear to be the options of choice in the near-term options pits. Schaeffer's put/call open interest ratio (SOIR) for TEVA sits at 0.67, with calls easily outstripping puts among options expiring in the next three months. This ratio hovers just two percentage points above a yearly low, indicating short-term traders have rarely been more call-heavy toward the stock during the past year.

  • Down more that 15% in 2012, X saw its price target cut to $30 from $31 at UBS ahead of the opening bell. Meanwhile, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio checks in at 1.02, confirming puts bought to open have slightly outnumbered calls during the last couple of weeks. This ratio arrives in the 74th annual percentile, meaning traders have been scooping up puts over calls at an accelerated clip.

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