Schaeffer's Trading Floor Blog

Analysts Downgrades: Monster Beverage Corp, Dendreon Corporation (DNDN), and The Gap Inc.

Analysts downwardly revised their ratings on MNST, DNDN, and GPS

by 8/9/2013 9:23 AM
Stocks quoted in this article:

Analysts are weighing in today on energy drink guru Monster Beverage Corp (NASDAQ:MNST), biotech issue Dendreon Corporation (NASDAQ:DNDN), and retailer The Gap Inc. (NYSE:GPS). Here's a quick roundup of today's bearish brokerage notes.

  • Following last night's weaker-than-expected earnings report, MNST saw its price target slashed to $68 from $70 at Stifel. (J.P. Morgan Securities, meanwhile, raised its price target to $70 from $52.) On the charts, MNST boasts a six-month gain of 35.5%, and was last seen hovering around $63.47. With that being said, the stock's Schaeffer's put/call open interest ratio sits at 0.76, with calls outnumbering puts by roughly 4-to-3 among options with a shelf-life of three months or less. This ratio ranks higher than just 15% of all other readings taken over the year. In other words, Monster Beverage Corp's short-term traders are more call-heavy than usual right now.

  • After announcing a steeper-than-expected quarterly loss yesterday, DNDN stumbled 13.5% in pre-market, spurring Credit Suisse and Cantor to slice their price targets to $3 from $4, and to $5 from $7, respectively. Overall, DNDN has dropped 13.2% since the beginning of 2013 to its current trading level at $4.59. In this respect, short interest accounts for a whopping 34% of DNDN's available float, bringing the total number of shares sold short to 50.2 million. At the stock's average pace of trading, it would take nearly 18 sessions for Dendreon Corporation's short sellers to cover these bearish bets.

  • GPS saw its rating lowered to "neutral" from "positive" at Susquehanna ahead of today's opening bell. (On the other hand, Susquehanna and Wedbush raised their price targets for the stock.) Technically speaking, GPS has grown 46.7% since the start of 2013. What's more, the stock reached a new 13-year high of $46.56 on Aug. 6, before stooping to its current perch at$45.52. Still, GPS sports an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day put/call volume ratio of 0.86, which ranks in the 76th percentile of its annual range. This means The Gap Inc.'s traders have been snatching up puts over calls at a faster-than-usual rate within the last two weeks.

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