Schaeffer's Trading Floor Blog

Analyst Downgrades: Texas Instruments, MetroPCS Communications, and Chipotle Mexican Grill

Analysts downwardly revised their ratings on TXN, PCS, and CMG

by 10/11/2012 9:21 AM
Stocks quoted in this article:

Analysts are weighing in today on semiconductor stock Texas Instruments Incorporated (NASDAQ:TXN - 27.17), wireless communications provider MetroPCS Communications Inc (NYSE:PCS - 12.04), and quick-service restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG - 286.62). Here's a quick roundup of today's bearish brokerage notes.

  • As TXN prepares to report third-quarter earnings on Oct. 22, Credit Suisse lowered its price target to $26 from $32 at Credit Suisse ahead of the opening bell -- a move that could exacerbate the equity's year-over-year loss of roughly 9%. Nevertheless, calls are still the options of choice on the security, as reflected by TXN's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.45. In other words, traders have bought to open more than two calls for every put during the past four weeks.

  • Down about 7% in pre-market trading, PCS was downgraded to "underperform" from "perform" at Oppenheimer today after Sprint Nextel Corporation (NYSE:S) held off on making a counter bid for the company on Wednesday. The stock has trekked 41% higher during the past year, and has outperformed the broader S&P 500 Index (SPX) by more than 76 percentage points during the past three months, but that hasn't kept the skeptics at bay. Short interest on PCS soared by nearly 78% over the last two reporting periods, and now accounts for 3% of the equity's available float.

  • With CMG on deck to reveal quarterly earnings next week, the stock received a price-target cut to $350 from $420 at Wedbush this morning. Although the equity has shed more than 15% year-to-date, short-term traders are still showing a slight affinity for calls over puts, according to the security's Schaeffer's put/call open interest ratio (SOIR) of 0.91. In fact, this bullishly skewed ratio hovers just eight percentage points above an annual low, conveying that near-term traders have rarely been more call-heavy toward CMG during the past 12 months.

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