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Analysts are weighing in today on social gaming provider Zynga Inc (NASDAQ:ZNGA), electric car maker Tesla Motors Inc (NASDAQ:TSLA), and specialty retailer American Eagle Outfitters (NYSE:AEO). Here's a quick roundup of today's bearish brokerage notes.
- While ZNGA stands 16.5% higher year-to-date, the stock has hit a rough patch of late, falling more than 18% in the past month alone. As such, Benchmark initiated a "hold" rating and a price target of $2.98 for the stock, ahead of today's session. Meanwhile, in ZNGA's options pits, activity has been bullishly skewed in recent sessions. In fact, the stock's International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day call/put volume ratio of 10.75 ranks higher than 88% of all other readings taken over the past year, indicating ZNGA speculators have bought to open calls over puts at a faster-than-usual-rate during the last two weeks. Given that short interest grew 36% in the latest reporting period, it is possible that the escalation of call activity is due to ZNGA short sellers hedging their bearish bets. Or, perhaps, speculators are call-biased because potential profit for put buyers is low, considering Zynga Inc sits at just $2.75.
- TSLA has had a momentous run on the charts this past year, skyrocketing nearly 394% to its current perch at $147.86. Not to mention, off the charts, the company's Model S received an overall five-star safety rating from the National Highway Traffic Safety Administration (NHTSA). Still, one new analyst is predicting an end to TSLA's technical prowess. Specifically, Stifel initiated a "hold" rating for the stock this morning. Elsewhere, options traders are skeptical, as well. TSLA's Schaeffer's put/call open interest ratio (SOIR) of 1.87 ranks just 1 percentage point short of an annual high, conveying short-term traders have rarely been more put-heavy throughout the last year. Should Tesla Motors Inc's luck continue, this heavy amount of put activity could translate into contrarian tailwinds, as these bearish bets begin to unwind.
- After announcing a 7% decline in same-store sales yesterday morning, AEO plummeted to an annual low of $14.33, spurring Barclays, B. Riley & Co., RBC, and Oppenheimer to slash their price targets for the stock in pre-market action. Stepping back, AEO has suffered a year-to-date loss of 28%. Elsewhere, the majority of the brokerage bunch holds a pessimistic outlook. From the 19 analysts weighing in, AEO has received 13 "holds," compared to six "buy" or better endorsements. On the other hand, the stock's 12-month price target of $18.05 represents expected upside to its current price of $14.76. Should American Eagle Outfitters continue to disappoint on and off the charts, there's plenty of room for additional price-target cuts to potentially pressure the shares lower.