Schaeffer's Trading Floor Blog

Analyst Downgrades: VeriFone Systems, OpenTable, and Garmin

Analysts downwardly revised their ratings on PAY, OPEN, and GRMN

by 2/21/2013 9:07 AM
Stocks quoted in this article:

Analysts are weighing in today on electronic payment provider VeriFone Systems Inc (NYSE:PAY - 31.89), restaurant reservation website OpenTable Inc (NASDAQ:OPEN - 55.39), and navigation device manufacturer Garmin Ltd. (NASDAQ:GRMN - 3.70). Here's a quick roundup of today's bearish brokerage notes.

  • Down a whopping 34% in pre-market trading, PAY was hammered with negative attention this morning, after slashing its fiscal first-quarter outlook and issuing lackluster current-quarter guidance last night. Both J.P. Morgan Securities and Piper Jaffray lowered the stock to "neutral" from "overweight," while Citigroup, Wedbush Securities, UBS, Raymond James, and Suntrust also handed out downgrades and/or price-target cuts. However, skepticism was already running high toward PAY, as short interest on the equity spiked by roughly 16% during the past month. These bearish bets now account for about 9.5% of the security's available float.

  • Although OPEN has trekked about 13.5% higher in 2013, the stock was reduced to "market perform" from "outperform" at Raymond James 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 call/put volume ratio of 1.80 for OPEN, indicating calls bought to open have nearly doubled puts during the last two weeks. This ratio ranks higher than 60% of comparable readings taken within the last 12 months, meaning traders have been scooping up calls over puts at a slightly accelerated clip.

  • GRMN -- which has shed close to 13% year-to-date -- saw its price target cut to $47 from $53 at RBC today, after reporting disappointing quarterly earnings Wednesday morning. Nevertheless, four of the 10 analysts covering GRMN still maintain "strong buy" endorsements for the stock, while the remaining six have handed out "hold" or worse recommendations. What's more, the security's average 12-month price target of $44.38 reflects expected upside of about 25% to Wednesday's closing price of $35.54, suggesting more negative notes could be on the horizon.

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