Analyst Downgrades: Netflix, Amazon, and Cree

Analysts downwardly revised their ratings on Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN), and Cree, Inc. (NASDAQ:CREE)

Jun 25, 2015 at 9:48 AM
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Analysts downwardly revised their ratings on streaming giant Netflix, Inc. (NASDAQ:NFLX), e-commerce concern Amazon.com, Inc. (NASDAQ:AMZN), and LED specialist Cree, Inc. (NASDAQ:CREE). Here's a quick roundup of today's bearish brokerage notes on NFLX, AMZN, and CREE.

  • It's been a big week for NFLX, after yesterday's announcement of a stock split sent the shares to a record high of $706.24. Additionally, Carl Icahn said he banked a pretty penny after selling his remaining stake in the company. Today, however, NFLX is down 2.4% at $662.14 -- bringing its year-to-date lead to 94% -- after Citigroup lowered its rating to "neutral" from "buy." Given Netflix, Inc.'s outstanding technical showing in 2015, sentiment in the options pits remains high. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 1.11 ranks in the 90th annual percentile. In other words, calls have been bought to open over puts with more rapidity just 10% of the time within the past year.

  • Evercore ISI cut its outlook on AMZN to "hold" from "buy," explaining the shares -- last seen 0.9% lower at $436.92 -- are within striking distance of the brokerage firm's price target of $460. Technically speaking, the stock has had a strong year -- up 41%, and less than 4 percentage points away from taking out its April 24 all-time high of $452.65. Short-term speculators, meanwhile, have shown a preference for puts over calls, as evidenced by AMZN's Schaeffer's put/call open interest ratio (SOIR) of 1.07, which sits higher than 68% of all similar readings taken in the past year. Should Amazon.com, Inc. extend its long-term trajectory, an unwinding of these put positions could help buoy the shares. Meanwhile, on the fundamental front, the company made headlines earlier this week when it announced a big change to its smart-home/speaker device, Echo. Today, AMZN explained the mystery behind its "Treasure Truck" -- which has been circling the Seattle area.

  • CREE has given back 10.8% out of the gate to trade at $27.25 -- and earlier hit a two-year low of $27.10 -- after the company announced it will restructure its light-emitting diode (LED) division and downwardly revised its current-quarter sales outlook. Adding to the bearish bias are price-target cuts from Canaccord Genuity (to $28) and Cowen and Company (to $25), the latter of which rests in territory not seen by CREE since October 2012. It's been a fairly lackluster run for the stock in recent months, which encountered stiff resistance at the round-number $40 mark in late February and early March -- and has since lost almost 32%. Nevertheless, call buying has been popular in recent months. At the ISE, CBOE, and PHLX, Cree, Inc.'s 50-day call/put volume ratio of 1.90 rests in the 80th annual percentile.

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