Schaeffer's Trading Floor Blog

Analyst Downgrades: Pandora Media, Darden Restaurants, and Tibco Software

Analysts downwardly revised their ratings on P, DRI, and TIBX

by 12/5/2012 9:14 AM
Stocks quoted in this article:

Analysts are weighing in today on Internet radio issue Pandora Media Inc (NYSE:P - 9.45), restaurant operator Darden Restaurants, Inc. (NYSE:DRI - 47.40), and infrastructure software provider Tibco Software Inc. (NASDAQ:TIBX - 24.72). Here's a quick roundup of today's bearish brokerage notes.

  • Down about 17% in pre-market trading, P was hammered with bearish attention this morning, after slashing its full-year guidance and forecasting a loss for the current quarter. Canaccord Genuity lowered its price target to $12 from $16, while BMO, Barclays, J.P. Morgan, Nomura, Raymond James, and Stifel Nicolaus also issued downward price-target adjustments. The equity has lost about 8% from the year-ago period, which could explain the skepticism already surrounding P. Short interest accounts for 31% of the stock's available float -- or the equivalent of 13 days' worth of pent-up buying pressure, at the security's average daily trading volume.

  • Similarly, DRI was downgraded to "hold" from "buy," and saw its price target cut to $47 from $61 at Jefferies today, after issuing a weak fiscal second-quarter outlook and reducing its 2013 guidance yesterday. Adding insult to injury, UBS also lowered its price target to $52 from $62. The security has advanced more than 13% during the past year, yet put buying continues to gain traction on DRI. The equity's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 2.33, signaling traders have bought to open more than two puts for every call over the past month.

  • Also off about 14% ahead of the open is TIBX, which was hit with a barrage of bearish brokerage notes after last night's warning that its current-quarter results will likely fall short of Wall Street's projections. Specifically, Nomura cut its price target to $24 from $33, while JMP Securities, J.P. Morgan, Susquehanna, Jefferies, BMO, Wedbush, Stifel Nicolaus, and UBS also reduced their respective price targets. Meanwhile, although TIBX has declined about 13% on a year-over-year basis, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.53 ranks in the 18th annual percentile. In other words, near-term traders have been more call-heavy toward the equity less than one-fifth of the time during the past year.

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