Analyst Downgrades: Pandora, Stratasys, and Luminex

Analysts are weighing in today on Pandora Media Inc (P), Stratasys, Ltd. (SSYS), and Luminex Corporation (LMNX)

Feb 3, 2015 at 9:28 AM
facebook twitter linkedin


Analysts are weighing in today on streaming music giant Pandora Media Inc (NYSE:P), 3-D printing specialist Stratasys, Ltd. (NASDAQ:SSYS), and biological testing firm Luminex Corporation (NASDAQ:LMNX). Here's a quick roundup of today's bearish brokerage notes on P, SSYS, and LMNX.

  • J.P. Morgan Securities cut its price target on P to $34 from $35 -- and underscored its "overweight" rating -- although this new forecast is double last night's close at $16.95. Technically speaking, the stock has been on a steady downtrend since topping out at a record peak of $40.44 last March, down 58%. Should Pandora Media Inc turn in a poorly received earnings report after this Thursday's close, another round of bearish brokerage notes could be on the horizon. Currently, 77% of covering analysts maintain a "buy" or better rating, while the average 12-month price target of $28.78 stands at a 70% premium to P's present perch.

  • SSYS is bracing for a 28% drop out of the gate -- and a move into annual-low territory -- after another downwardly revised fourth-quarter profit estimate and weak fiscal 2015 forecast was met with a round of bearish analyst attention. J.P. Morgan Securities, for example, slashed its price target by $43 to $70, while Brean Capital reduced its outlook to "hold" from "buy." Since hitting its most recent high of $125 in early November, the stock has surrendered 36% under the weight of its 40-day moving average, and settled last night at $80.08. This has more than likely been music to the ears of short sellers. Short interest rose 4.4% in the latest reporting period, and now accounts for more than one-fifth of Stratasys, Ltd.'s available float.

  • LMNX received price-target cuts from Leerink (to $18), Jefferies (to $17), and Wedbush (to $18), after the firm offered up a lower-than-expected 2015 revenue outlook. Since being swiftly rejected by the round-number $20 mark in mid-January, shares of LMNX have shed 12%, and closed last night at $17.68. Options traders have kept the faith, though, and -- at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- have bought to open 25 calls for every put over the past 10 sessions. Echoing this call-skewed trend is Luminex Corporation's Schaeffer's put/call open interest ratio (SOIR) of 0.87, which ranks lower than 76% of similar readings taken in the past year. Simply stated, short-term speculators are more call-heavy than usual.
 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners