Schaeffer's Trading Floor Blog

Analyst Downgrades: F5 Networks, Virgin Media, and Citrix Systems

Analysts downwardly revised their ratings on FFIV, VMED, and CTXS

by 10/25/2012 9:26 AM
Stocks quoted in this article:

Analysts are weighing in today on tech issue F5 Networks, Inc. (NASDAQ:FFIV - 93.32), entertainment firm Virgin Media Inc. (NASDAQ:VMED - 32.94), and market technology solutions provider Citrix Systems, Inc. (NASDAQ:CTXS - 64.08). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 11% in pre-market trading, FFIV was hammered with bearish attention today after forecasting current-quarter guidance that fell short of analysts' projections. Piper Jaffray slashed its price target to $106 from $130, while Barclays, UBS, Nomura, Cantor Fitzgerald, BMO, Mizuho Securities, Janney Capital, and Lazard also issued downward price-target adjustments. The stock is down about 12% year-to-date, yet call buyers are still showing an interest in FFIV. The security's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 1.23, indicating calls bought to open have outpaced puts during the past month.

  • Just two days after reporting strong third-quarter earnings results, VMED was downgraded to "neutral" from "buy" at Citigroup ahead of the open. (Canaccord Genuity, however, raised its price target to $41 from $33.) The security has gained about 54% so far this year -- and bested the broader S&P 500 Index (SPX) by more than 18 percentage points during the past three months -- but that hasn't dissuaded skeptics from zeroing in on VMED. Short interest on the stock accounts for a hefty 14% of its available float. It would take nearly three weeks to buy back these shorted shares, at the equity's average pace of trading.

  • CTXS was also hit with a barrage of bearish brokerage notes this morning, thanks to a weaker-than-expected quarterly earnings report. Specifically, Nomura cut its price target to $78 from $86, while Barclays, Jefferies, Susquehanna, and Mizuho Securities also lowered their respective price targets. The equity -- which has tacked on approximately 5.5% in 2012 -- has been popular with near-term call players lately. In fact, Schaeffer's put/call open interest ratio (SOIR) for CTXS checks in at 0.48, conveying calls more than double puts among options expiring in the next three months. This ratio sits at an annual low, meaning short-term traders are more call-heavy toward the stock now than at any other time during the past year.

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