Schaeffer's Trading Floor Blog

Analyst Downgrades: Tiffany & Co, Zumiez, and Stanley Black & Decker

Analysts downwardly revised their ratings on TIF, ZUMZ, and SWK

by 11/30/2012 9:11 AM
Stocks quoted in this article:

Analysts are weighing in today on fine jewelry diva Tiffany & Co. (NYSE:TIF - 59.80), sportswear retailer Zumiez Inc. (NASDAQ:ZUMZ - 20.75), and diversified projects manufacturer Stanley Black & Decker, Inc. (NYSE:SWK - 73.30). Here's a quick roundup of today's bearish brokerage notes.

  • TIF received price-target cuts at Canaccord Genuity (to $65 from $71) and Jefferies (to $55 from $62) this morning, after reporting quarterly earnings that fell short of analysts' projections, and slashing its full-year outlook. The security has surrendered about 10% so far this year, yet call activity continues to flourish among the short-term crowd. Schaeffer's put/call open interest ratio (SOIR) for TIF stands at 0.59, indicating calls nearly double puts among options expiring within the next three months. This ratio hovers just three percentage points from a yearly low, meaning near-term traders have rarely been more bullishly skewed toward the stock during the last 52 weeks.

  • Down more than 8% in pre-market trading, ZUMZ was hit with plenty of bearish attention today, thanks to weaker-than-expected third-quarter revenue, as well as a lackluster current-quarter outlook. Janney Capital lowered its price target to $21 from $24, while Jefferies and BMO also issued downward price-target adjustments. The stock has shed more than 25% in 2012, so it stands to reason that ZUMZ is surrounded by skepticism. Short interest accounts for roughly 13% of the equity's available float. In fact, it would take more than four days to unwind these bearish bets, at the security's average pace of trading.

  • Finally, SWK was cut to "neutral" from "buy" at Longbow Research ahead of the opening bell, which could chip away at the equity's year-to-date gain of more than 8%. Meanwhile, put buying has been running rampant on the security lately. SWK's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 4.38, signaling traders have bought to open more than four puts for every call during the past two weeks. This ratio ranks higher than 91% of similar readings taken within the last 12 months, confirming speculators have been snapping up puts over calls at a near annual-high clip.

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