Schaeffer's Trading Floor Blog

Analyst Downgrades: Apple Inc. (AAPL), Target, and Skullcandy

Analysts downwardly revised their ratings on AAPL, TGT, and SKUL

by 1/2/2013 9:15 AM
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Analysts are weighing in today on tech giant Apple Inc. (NASDAQ:AAPL - 532.17), broadline retailer Target Corporation (NYSE:TGT - 59.17), and audio accessories manufacturer Skullcandy Inc (NASDAQ:SKUL - 7.79). Here's a quick roundup of today's bearish brokerage notes.

  • AAPL was hit with a price-target cut to $690 from $700 at Raymond James this morning, although the brokerage firm reiterated its "outperform" rating. Given the equity's advance of more than 31% during the past year, it's no surprise that near-term traders seem to prefer calls over puts. Schaeffer's put/call open interest ratio (SOIR) for AAPL checks in at 0.68, with calls comfortably outstripping puts among options slated to expire in the next three months. This ratio resides in the 16th percentile of its annual range, reflecting a stronger-than-usual preference for short-term calls over puts.

  • As TGT prepares to reveal December sales data tomorrow, the security was downgraded to "hold" from "buy," and saw its price target slashed to $59 from $74 at Jefferies today. Also, J.P. Morgan Securities reduced its price target to $74 from $76. The shares have gained roughly 16% on a year-over-year basis, but that hasn't deterred put players. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 1.99, confirming puts bought to open have nearly doubled calls during the past two weeks. This ratio is six percentage points shy of a bearish peak, meaning traders have been picking up puts over calls at a near annual-high clip.

  • Down about 1.2% in pre-market action, SKUL was lowered to "underperform" from "buy," and received a price-target cut to $6 from $17 at Jefferies ahead of the opening bell. The stock has surrendered nearly 38% in the past 12 months, which could explain the cloud of skepticism hanging over SKUL. Short interest on the equity edged 1.3% higher during the most recent reporting period, and now these bearish bets account for a whopping 41% of SKUL's available float. In fact, it would take 14 days to buy back these shorted shares, at the security's average daily trading volume.

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