Schaeffer's Trading Floor Blog

Analyst Downgrades: Universal Display, Monster Beverage, and Autodesk

Analysts downwardly revised their ratings on PANL, MNST, and ADSK

by 11/8/2012 9:14 AM
Stocks quoted in this article:

Analysts are weighing in today on OLEDs developer Universal Display Corporation (NASDAQ:PANL - 28.18), energy drink behemoth Monster Beverage Corp (NASDAQ:MNST - 44.97), and software concern Autodesk, Inc. (NASDAQ:ADSK - 31.57). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 26% in pre-market trading, PANL was pummeled with bearish attention today, after unexpectedly revealing a third-quarter earnings loss yesterday. Specifically, Wedbush downgraded the stock to "neutral" from "outperform," while Canaccord Genuity, JMP Securities, and Piper Jaffray issued price-target cuts. The equity is down more than 43% from the year-ago period, which hasn't gone unnoticed by skeptics. Although short interest on the security declined by about 15% during the past month, these bearish bets still account for a hefty 28% of PANL's float. It would take more than 16 days to cover these shorted shares, at the stock's average pace of trading.

  • Also off more than 10% ahead of the open is MNST, which saw its price target lowered to $52 from $70 at J.P. Morgan, and to $60 from $65 at Suntrust Robinson this morning, thanks to a weaker-than-anticipated quarterly earnings report. Meanwhile, near-term bears have been converging on the stock lately, which is virtually unchanged over the past 12 months. Schaeffer's put/call open interest ratio (SOIR) for MNST sits at 1.15, indicating puts outnumber calls among options expiring in the next three months. This ratio ranks in the 82nd annual percentile, meaning short-term traders have been more put-heavy toward the equity just 18% of the time during the past year.

  • ADSK -- which is scheduled to report fiscal third-quarter earnings on Nov. 15 -- was cut to "hold" from "buy" and received a downward price-target adjustment to $34 from $39 at Jefferies today, which could chip away at the equity's year-to-date gain of 4%. In the options pits, calls have a definitive edge over puts, as evidenced by the security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.91. In other words, calls bought to open have nearly quadrupled puts over the last two weeks. This ratio resides in the 87th percentile of its annual range, conveying traders have been buying calls over puts at a faster-than-usual pace.

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