Schaeffer's Trading Floor Blog

Analyst Downgrades: Altria Group, Western Digital, and Advanced Micro Devices

Analysts downwardly revised their ratings on MO, WDC, and AMD

by 10/12/2012 9:08 AM
Stocks quoted in this article:

Analysts are weighing in today on tobacco giant Altria Group, Inc. (NYSE:MO - 32.71), data storage provider Western Digital Corp. (NASDAQ:WDC - 36.59), and tech issue Advanced Micro Devices, Inc. (NYSE:AMD - 3.20). Here's a quick roundup of today's bearish brokerage notes.

  • With third-quarter earnings scheduled for later this month, MO saw its price target cut to $33 from $36 at Barclays ahead of the opening bell -- a move that could chip away at the equity's year-over-year gain of more than 18%. Nevertheless, short-term traders are still showing an affinity for calls over puts. Schaeffer's put/call open interest ratio (SOIR) for MO checks in at 0.88, confirming that calls outweigh puts among the front three-months' series of options. This ratio arrives in the 19th percentile of its annual range, meaning near-term options players have rarely been more call-heavy toward the stock during the past year.

  • As WDC prepares to report quarterly earnings on Oct. 22, the security was downgraded to "sell" from "buy" today at Citigroup. The stock currently boasts a 52-week advance of roughly 28%, which may be attracting bullish traders. 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 3.08, indicating that calls bought to open have more than tripled puts during the past two weeks. This ratio is docked in the 69th annual percentile, conveying that speculators have been scooping up calls over puts at an accelerated clip.

  • Down more than 8% in pre-market action, AMD was hammered with bearish attention this morning after the company downwardly revised its third-quarter outlook. Specifically, Jefferies slashed its price target to $5 from $8, while Canaccord Genuity, Deutsche Bank, USB, Sterne Agee, BMO, Susquehanna, Wedbush, FBR, Bernstein, Raymond James, and Nomura also issued downward price-target adjustments. The stock has surrendered nearly 41% year-to-date, and the skeptics have taken notice. Short interest on AMD jumped by about 29% during the past month, and now accounts for about 24% of the equity's available float.

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