Schaeffer's Trading Floor Blog

Analyst Downgrades: Sprint Nextel, Fifth Third Bancorp, and Fossil

Analysts downwardly revised their ratings on S, FITB, and FOSL

by 2/11/2013 9:18 AM
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Analysts are weighing in today on wireless communications provider Sprint Nextel Corporation (NYSE:S - 5.77), financial services firm Fifth Third Bancorp (NASDAQ:FITB - 16.61), and accessories maven Fossil, Inc. (NASDAQ:FOSL - 103.90). Here's a quick roundup of today's bearish brokerage notes.

  • On the heels of reporting a wider quarterly loss last Thursday, S was downgraded to "neutral" from "overweight" at Atlantic Equities this morning. The equity sports a year-over-year gain of almost 152%, yet the majority of covering analysts appear to maintain a cautious attitude toward S. The security currently sports seven "strong buy" recommendations, compared to 13 "holds," and two "strong sell" suggestions. Meanwhile, Thomson Reuters shows an average 12-month price target of $6.25 for the stock, representing expected upside of 8.3% to Friday's closing price of $5.77.

  • Despite a year-to-date advance of more than 9%, FITB was cut to "hold" from "buy" at Stifel Nicolaus ahead of the opening bell. However, sentiment among the short-term crowd appears to be more optimistic. The equity's Schaeffer's put/call open interest ratio (SOIR) stands at 0.66, with calls easily outnumbering puts among options with a shelf-life of three months or less. This ratio is docked in the 18th percentile of its annual range, meaning near-term options players have rarely been more call-heavy toward FITB during the last 12 months.

  • On the eve of tomorrow morning's fourth-quarter earnings report, FOSL was lowered to "hold" from "buy" at Benchmark today. (Jefferies, however, raised its price target to $125 from $115.) The stock has climbed almost 12% so far this year, which may have sparked some bullish options activity. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 4.27 for FOSL, confirming traders have bought to open more than four calls for every put during the past two weeks. This ratio is just 4 percentage points shy of a yearly peak, conveying traders have been buying calls over puts at a near annual-high pace.

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