Analyst Update: Amazon, Intel Corporation, Chuy's

Analysts offered their two cents on AMZN, INTC, and CHUY

Nov 5, 2014 at 2:41 PM
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U.S. stocks are exploring record-high territory, as traders cheer a Republican-controlled Congress. Among equities attracting the attention of analysts are e-commerce titan Amazon.com, Inc. (NASDAQ:AMZN), blue-chip tech concern Intel Corporation (NASDAQ:INTC), and Mexican restaurateur Chuy's Holdings Inc (NASDAQ:CHUY).

  • AMZN is down 2.1% at $296.43, extending its swoon in the wake of competitor Alibaba Group Holding Ltd's (NYSE:BABA) warm earnings reception. Exacerbating selling pressure on AMZN is a now-public letter to investors of Greenlight Capital, in which founder David Einhorn added the stock to his "Bubble Basket" of overvalued tech stocks. "One of the principal bullish assumptions supporting many bubble stocks is, 'the company is growing too fast to be very profitable.' We think AMZN is just one of many stocks for which this narrative will prove false," the activist investor wrote. If Einhorn is, in fact, shorting Amazon.com, Inc., the bearish bandwagon is far from crowded; just 1.9% of the stock's float is sold short.

  • INTC is 1.8% lower, after Bernstein downgraded the stock to "underperform" from "market perform," and offered up a $30 price target -- representing a discount to the equity's current price of $33.71. Analysts are split when it comes to Intel Corporation, with half doling out "hold" or worse recommendations. Options traders, on the other hand, have grown increasingly fond of INTC puts in the wake of the stock's post-earnings dip in mid-October, even as the shares have filled in their bearish gap. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio has rallied to 1.83 -- just 2 percentage points from an annual pessimistic peak. Likewise, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.06 stands higher than 85% of all other readings from the past year, suggesting short-term traders have rarely been more put-heavy.

  • Finally, CHUY has surrendered 29.7% to trade at $21.21 -- and earlier touched a near-two-year low of $20.65 -- as traders pan the company's third-quarter earnings miss and downwardly revised full-year guidance. The stock is among the biggest percentage losers on the Nasdaq, landing on the short-sale restricted list. No fewer than four brokerage firms cut their price targets on Chuy's Holdings Inc, including Wedbush, which trimmed its target to $26 from $29. Meanwhile, Raymond James and Baird downgraded CHUY from "outperform" to "market perform" and "neutral," respectively, while Longbow Research revised its opinion to "neutral" from "buy." One group likely cheering the earnings reaction: short sellers. Short interest grew 29.2% during the past two reporting periods, and now accounts for 17.3% of CHUY's total available float.
 

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