Schaeffer's Trading Floor Blog

Analyst Downgrades: Cisco Systems, VIVUS, and Cree

Analysts downwardly revised their ratings on CSCO, VVUS, and CREE

by 1/17/2013 9:20 AM
Stocks quoted in this article:

Analysts are weighing in today on tech concern Cisco Systems, Inc. (NASDAQ:CSCO - 21.03), biopharmaceutical firm VIVUS, Inc. (NASDAQ:VVUS - 14.32), and LED specialist Cree, Inc. (NASDAQ:CREE - 32.61). Here's a quick roundup of today's bearish brokerage notes.

  • CSCO -- which has advanced about 7% so far this year -- was downgraded to "underweight" from "neutral" at J.P. Morgan Securities ahead of the opening bell. However, sentiment in the options pits is more favorable toward the stock. According to data pulled from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CSCO's 20-day call/put volume ratio checks in at 2.29. In other words, calls bought to open have more than doubled puts during the last four weeks.

  • Down almost 5% in pre-market action, VVUS was cut to "sell" from "hold" at Brean Capital this morning -- a move that could chip away at the stock's year-to-date gain of almost 7%. Meanwhile, near-term traders have been showing their confidence in VVUS. The equity's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.32, with calls more than tripling puts among options scheduled to expire in the next three months. This ratio is just 1 percentage point above a yearly nadir, meaning short-term options players have rarely been more bullishly aligned toward the shares during the last 12 months.

  • As CREE prepares to report quarterly earnings on Jan. 22, the equity was lowered to "underperform" from "buy," and saw its price target reduced to $28 from $30 at Jefferies today. The security is off about 4% in 2013, and has trailed the broader S&P 500 Index (SPX) by 7 percentage points during the past four weeks. Nevertheless, the sentiment among the brokerage bunch remains evenly divided. CREE currently sports 12 "buy" or better recommendations, compared to eight "holds" and four "sell" or worse ratings. This leaves the door wide open for downgrades down the road, which could pressure the security lower.

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