Schaeffer's Trading Floor Blog

Analyst Downgrades: Biogen Idec, AT&T, and UnitedHealth Group

Analysts downwardly revised their ratings on BIIB, T, and UNH

by 1/3/2013 9:21 AM
Stocks quoted in this article:

Analysts are weighing in today on biotech company Biogen Idec Inc. (NASDAQ:BIIB - 150.00), telecom issue AT&T Inc. (NYSE:T - 35.00), and health benefits firm UnitedHealth Group Inc. (NYSE:UNH - 54.54). Here's a quick roundup of today's bearish brokerage notes.

  • Down about 5.5% in pre-market trading, BIIB was downgraded to "neutral" from "overweight" at Piper Jaffray this morning. The company said today it would halt development of its dexpramipexole drug for the treatment of Lou Gehrig's disease (also known as ALS), after clinical trials failed to meet expectations. Still, given the security's climb of nearly 32% during the past year, it's no surprise that most of covering analysts maintain a favorable view of BIIB. The stock boasts 12 "strong buys" and one "buy" endorsement, compared to eight "holds," and zero "sell" suggestions.

  • Despite a year-over-year advance of about 15%, T saw its price target reduced to $33 from $33.50 at Macquarie ahead of the opening bell. Elsewhere, the stock has been swarmed by short-term bears lately. T's Schaeffer's put/call open interest ratio (SOIR) checks in at 2.23, indicating puts more than double calls among options with a shelf life of three months or less. In fact, this ratio is just eight percentage points shy of a bearish annual peak, meaning near-term traders have rarely been more put-heavy toward the security during the last 12 months.

  • With quarterly earnings scheduled for later this month, UNH was cut to "hold" from "buy" at Deutsche Bank today. Meanwhile, the equity -- which has climbed a modest 4.4% over the last 52 weeks -- is seeing plenty of buy-to-open call activity in the options pits. UNH's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 1.45. In other words, speculators have bought to open 145 calls for every 100 puts during the past four weeks.

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