Schaeffer's Trading Floor Blog

Analyst Downgrades: NVIDIA, Vodafone, and Fifth Third

Analysts downwardly revised their ratings on NVDA, VOD, and FITB

by 9/4/2012 9:15 AM
Stocks quoted in this article:

Analysts are weighing in today on graphic chip maker NVIDIA Corporation (NASDAQ:NVDA - 14.03), wireless concern Vodafone Group Plc (ADR) (NASDAQ:VOD - 28.92), and banking name Fifth Third Bancorp (NASDAQ:FITB - 15.14). Here's a quick roundup of today's bearish brokerage notes.

  • Evercore Partners lowered its price target for NVDA to $13 from $15* this morning and reduced its rating to "underweight" from "equal weight." This could chip away at the equity's year-over-year gain of about 9%. Even so, options players have been showing an affinity for NVDA calls over puts. In fact, the stock's Schaeffer's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 12.29, indicating that traders have bought to open more than a dozen calls for every put during the past two weeks. This ratio is just six percentage points away from a yearly peak, meaning traders have been snapping up calls over puts an a near annual-high pace.

  • On the heels of announcing a multi-country partner market agreement with Zain Group, VOD was downgraded to "market perform" from "outperform" and saw its price target cut to $27 from $33.65 at Bernstein in pre-market action. VOD currently sits on 12-month gain of about 10%, so it stands to reason that near-term calls would outweigh puts. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.22, conveying that calls nearly quadruple puts among the front three-months' series of options. This ratio hovers just three percentage points above an annual low, implying that short-term traders have rarely been more call-heavy toward the security.

  • Despite climbing more than 57% during the past year -- and besting the broader S&P 500 Index (SPX) by north of 10 percentage points during the past 60 sessions -- FITB was bumped down to "equal weight" from "overweight" at Evercore Partners ahead of the opening bell. Meanwhile, the skeptics have been piling onto FITB lately, as short interest on the equity ramped up by more than 19% during the last two reporting periods. However, the stock's bearish camp is far from crowded, as these shorted shares make up less than 2% of the security's available float.

*Editorial note: This price target has been corrected from an earlier version.


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