Schaeffer's Trading Floor Blog

Analyst Downgrades: Delta Air Lines, DreamWorks Animation, and InterDigital

Analysts downwardly revised their ratings on DAL, DWA, and IDCC

by 12/7/2012 9:08 AM
Stocks quoted in this article:

Analysts are weighing in today on airline giant Delta Air Lines, Inc. (NYSE:DAL - 10.02), animated film producer DreamWorks Animation SKG, Inc. (NASDAQ:DWA - 16.80), and semiconductor stock InterDigital, Inc. (NASDAQ:IDCC - 44.70). Here's a quick roundup of today's bearish brokerage notes.

  • DAL received a price-target cut to $13 from $14 at Barclays this morning, amid reports that California's attorney general office plans to sue the airliner over the distribution of a mobile app without a privacy policy. The equity has advanced about 24% so far this year, which could explain why most of the analysts covering DAL maintain an upbeat attitude. The stock currently boasts eight "strong buys" and one "buy" recommendation, compared to two lukewarm "holds" and not a single "sell" suggestion.

  • Down more than 4% from the year-ago period, DWA saw its price target reduced to $15 from $18 at Barclays today. In the short-term options pits, traders seem less than impressed with the security. Schaeffer's put/call open interest ratio (SOIR) for DWA sits at 1.58, with puts outpacing calls among options expiring in the next three months. This ratio is just one percentage point shy of a bearish peak, confirming near-term traders have rarely been more put-heavy toward the equity during the past year.

  • IDCC was downgraded to "equal weight" from "overweight" at Stephens ahead of the open, just a day after announcing a special dividend of $1.50 per share, while also moving its quarterly dividend payout to 2012. Although the security has gained about 7% on a year-over-year basis, there is still plenty of skepticism lingering over IDCC. Short interest represents a lofty 16% of the stock's available float. It would take more than nine days to buy back these shorted shares, at the equity's average daily trading volume.

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