Schaeffer's Trading Floor Blog

Analyst Downgrades: First Solar, Las Vegas Sands, and Vertex Pharmaceuticals

Analysts downwardly revised their ratings on FSLR, LVS, and VRTX

by 11/2/2012 9:13 AM
Stocks quoted in this article:

Analysts are weighing in today on alternative energy concern First Solar, Inc. (NASDAQ:FSLR - 24.75), casino operator Las Vegas Sands Corp. (NYSE:LVS - 46.46), and drug maker Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX - 50.48). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 7% in pre-market trading, FSLR was downgraded to "hold" from "buy" at Cantor Fitzgerald today, after reporting a 55% drop in third-quarter earnings, along with revenue that fell short of analysts' projections. (However, Canaccord Genuity, Macquarie, and UBS issued upward price-target adjustments.) The equity has surrendered close to 49% from the year-ago period, which may be attracting skeptics. Short interest on FSLR rose by 4% during the most recent reporting period, and now accounts for a whopping 50% of the security's float. It would take nearly a week to buy back these shorted shares, at the stock's average pace of trading.

  • A poorly received quarterly earnings report triggered a downgrade to "hold" from "buy" for LVS ahead of the open -- courtesy of Cantor Fitzgerald -- which could chip away at the security's year-to-date gain of nearly 9%. Meanwhile, traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than two calls for every put during the past few months. This 50-day call/put volume ratio of 2.08 ranks higher than 83% of similar readings taken during the past year, conveying speculators have rarely picked up calls over puts at a faster clip over the last 12 months.

  • VRTX -- which has declined nearly 7% in pre-market action -- was cut to "sell" from "neutral" at Goldman Sachs this morning, after revealing weaker-than-anticipated third-quarter earnings results. The equity has climbed about 52% so far this year, a fact that hasn't gone unnoticed by bullish near-term traders. The security's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.55, signaling calls nearly double puts among the front three-months' series of options. This ratio registers in the 27th percentile of its annual range, reflecting a stronger-than-usual preference for short-term calls over puts.

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