Schaeffer's Trading Floor Blog

Analyst Downgrades: Zynga, Mosaic, and Home Depot

Analysts downwardly revised their ratings on ZNGA, MOS, and HD

by 11/14/2012 9:23 AM
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Analysts are weighing in today on social game developer Zynga Inc (NASDAQ:ZNGA - 2.11), agricultural chemical producer Mosaic Co (NYSE:MOS - 50.75), and home improvement retailer The Home Depot, Inc. (NYSE:HD - 63.38). Here's a quick roundup of today's bearish brokerage notes.

  • ZNGA received a price-target cut to $2.50 from $3 at Piper Jaffray this morning, after revealing that its chief operating officer, David Wehner, is leaving the company, and will be replaced by chief mobile officer David Ko. The beleaguered stock has shed roughly 78% so far this year, which could explain why most of the analysts covering ZNGA maintain a cautious outlook. Only three have deemed the equity worthy of a "buy" or better rating, versus 15 tepid "holds" and two "sell" or worse recommendations.

  • Down nearly 5% in pre-market trading, MOS saw its price target lowered to $55 from $65 at Canaccord Genuity, and to $57 from $63 at BMO today, after slashing its quarterly potash and phosphates sales volume guidance on Tuesday. The equity has declined about 9% from the year-ago period, yet calls are still ruling the options pits. The security's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 2.57, confirming traders have bought to open 257 calls for every 100 puts during the past month.

  • Despite yesterday's strong quarterly earnings results, HD was downgraded to "market perform" from "strong buy" at Raymond James ahead of the open. (Meanwhile, Nomura, BMO, Stifel Nicolaus, and Canaccord Genuity issued upward price-target adjustments.) The security has trekked 66% higher during the past 12 months, but a number of short-term traders remain entrenched in HD's bearish camp. In fact, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.64 is docked in the 81st percentile of its annual range, indicating near-term options players have been more put-heavy toward the equity just 19% of the time during the past year.

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