Schaeffer's Trading Floor Blog

Analyst Downgrades: UnitedHealth Group, Vertex Pharmaceuticals, and Vodafone

Analysts downwardly revised their ratings on UNH, VRTX, and VOD

by 11/28/2012 9:16 AM
Stocks quoted in this article:

Analysts are weighing in today on health insurance firm UnitedHealth Group Inc. (NYSE:UNH - 52.59), drug maker Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX - 39.98), and mobile communications issue Vodafone Group Plc (ADR) (NASDAQ:VOD - 25.04). Here's a quick roundup of today's bearish brokerage notes.

  • UNH was hit with price-target cuts at Cantor Fitzgerald (to $63 from $70) and Jefferies (to $67 from $71) this morning, after the company projected slower-than-expected new-member growth for 2013. The equity has climbed roughly 15% during the past year, which may be attracting near-term bulls. The stock's Schaeffer's put/call open interest ratio (SOIR) sits at 0.66, with calls comfortably outnumbering puts among the front three-months' series of options. This ratio resides in the 22nd percentile of its annual range, suggesting short-term traders have been more optimistically aligned toward UNH less than one-fourth of the time during the last 52 weeks.

  • Down nearly 5% in pre-market trading, VRTX was downgraded to "hold" from "buy" at Argus today, which could chip away at the security's year-over-year gain of more than 46%. Meanwhile, puts appear to have the upper hand over calls in the options pits, as reflected by the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.44. This bearishly skewed figure ranks higher than 88% of comparable readings collected during the past year, conveying traders have been picking up puts over calls at a faster-than-usual pace.

  • VOD -- which has shed close to 11% in 2012 -- was lowered to "hold" from "buy" and saw its price target slashed to 185 pounds from 205 pounds at Berenberg ahead of the opening bell. The equity has also lagged the broader S&P 500 Index (SPX) by nearly 14 percentage points over the past 60 sessions, which could explain the recent uptick in bearish speculation on VOD. In fact, short interest on the security jumped by about 30% during the last two reporting periods. However, the stock's pessimistic camp is far from crowded, as these shorted shares make up less than 1% of VOD's float.

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