Schaeffer's Trading Floor Blog

Analyst Downgrades: American Express, Wells Fargo, and Zillow

Analysts downwardly revised their ratings on AXP, WFC, and Z

by 12/19/2012 9:22 AM
Stocks quoted in this article:

Analysts are weighing in today on credit card titan American Express Company (NYSE:AXP - 57.82), financial-services firm Wells Fargo & Company (NYSE:WFC - 34.96), and real estate website Zillow Inc (NASDAQ:Z - 27.21). Here's a quick roundup of today's bearish brokerage notes.

  • Despite a year-to-date advance of roughly 23%, AXP was downgraded to "equal weight" from "overweight" at Evercore Partners this morning. Elsewhere, short-term traders seem to share this bearish attitude toward the stock. AXP's Schaeffer's put/call open interest ratio (SOIR) sits at 1.48, with puts outpacing calls among the front three-months' series of options. This ratio ranks higher than 84% of similar readings taken within the past year, indicating near-term options players have been more put-heavy toward the equity just 16% of the time during the last 12 months.

  • Fellow financial name WFC also received some bearish attention at Evercore Partners today, who lowered its rating on the equity to "equal weight" from "overweight," and cut its price target to $37 from $39. The stock has climbed nearly 32% on a year-over-year basis, however, which may have instilled some confidence among the remaining covering analysts. WFC sports 16 "strong buys" and three "buy" recommendations, versus seven "holds" and one "strong sell" rating. What's more, the security's average 12-month price target of $38.93 reflects an 11.4% premium to yesterday's closing price of $34.96.

  • Finally, Z saw its price target reduced to $42 from $45 at Canaccord Genuity ahead of the opening bell -- a move that could chip away at the security's year-to-date gain of 21%. Meanwhile, put activity has been running rampant on the stock lately. In fact, Z's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio checks in at 2.99. In other words, puts bought to open have nearly tripled calls during the last four weeks.

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