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HollyFrontier Muscles Past Price-Target Cut

Barclays lowered its target for HFC by $8 to $29

by 11/25/2011 10:45:22 AM
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This morning, Barclays lowered its price target for HollyFrontier Corporation (HFC - 22.19) to $29 from $37. There could be additional target reductions ahead for HFC. According to Zacks, the average 12-month price target rests at $39.46, which represents a significant 76.2% premium to Wednesday's closing price of $22.40.

Meanwhile, 60% of the brokerage bunch considers HFC worthy of a "buy" or better endorsement. Zacks tallies seven "strong buys" and two "buys," versus six lukewarm "holds" and zero "sell" suggestions.

But not everyone on the Street is a fan of HFC. Despite depleting by 35.3% over the past month, short interest still accounts for a healthy 4.6% of the stock's available float.

Option players appear to have adopted a bearish stance toward HFC, as well. During the past 10 sessions, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1.31 puts for every call. This ratio arrives in the 83rd percentile of its annual range, signaling that traders on these exchanges have purchased puts over calls at a faster clip than usual during the past couple of weeks.

Furthermore, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.67 indicates that puts outnumber calls among options slated to expire within three months. This ratio ranks in the 99th percentile of its annual range -- one percentage point from a pessimistic peak -- indicating that near-term option traders have rarely been more bearishly aligned toward HFC.

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