Schaeffer's Trading Floor Blog

Analyst Downgrades: Nokia, VeriFone Systems, and SUPERVALU

Analysts downwardly revised their ratings on NOK, PAY, and SVU

by 9/6/2012 9:16 AM
Stocks quoted in this article:

Analysts are weighing in today on telecom issue Nokia Corporation (ADR) (NYSE:NOK - 2.38), electronic payment provider VeriFone Systems Inc (NYSE:PAY - 35.38), and grocery chain SUPERVALU INC. (NYSE:SVU - 2.28). Here's a quick roundup of today's bearish brokerage notes.

  • NOK was hit with some negative analyst attention this morning after the company's new Lumia smartphones failed to impress investors yesterday. Specifically, the stock was cut to "sell" from "hold" at S&P Capital IQ, while also receiving downgrades from Deutsche Bank and Societe Generale. With a 52-week decline of almost 63%, it stands to reason that skeptics have been gravitating toward the equity. Short interest on NOK has soared by approximately 32% during the past two reporting periods, and now represents more than 6% of the security's available float.

  • Down more than 11% in pre-market activity, PAY received price-target cuts at UBS ($39 from $41) and SunTrust Robinson ($45 from $55) after falling short of Wall Street's quarterly revenue projections. Although the equity hovers just below breakeven on a year-over-year basis, calls still outstrip puts in the options pits. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 20-day call/put volume ratio of 3.82 for PAY. In other words, calls bought to open have almost quadrupled puts during the past month.

  • SVU -- which has shed nearly 72% year-to-date -- saw its price target lowered to $3.50 from $4 after the struggling company announced yesterday plans to close 60 of its stores this year. The stock has also lagged the broader S&P 500 Index (SPX) by nearly 59 percentage points during the past two months. Not surprisingly, puts are the options of choice, as evidenced by the security's Schaeffer's put/call open interest ratio (SOIR) of 1.47. In fact, this ratio is just seven percentage points shy of a yearly peak, conveying that short-term traders have rarely been more put-heavy toward SVU during the past year.

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