Analyst Downgrades: Palo Alto Networks Inc, Deckers Outdoor Corp, and SolarCity Corp

Analysts downwardly revised their ratings and price targets on Palo Alto Networks Inc (PANW), Deckers Outdoor Corp (DECK), and SolarCity Corp (SCTY)

by Kirra Fedyszyn

Published on May 27, 2016 at 9:26 AM
Updated on May 27, 2016 at 9:26 AM

Analysts are weighing in on cybersecurity stock Palo Alto Networks Inc (NYSE:PANW), shoe and accessory maker Deckers Outdoor Corp (NYSE:DECK), and solar energy concern SolarCity Corp (NASDAQ:SCTY). Here's a quick roundup of today's bearish brokerage notes on PANW, DECK, and SCTY.

  • PANW reported fiscal third-quarter earnings in line with expectations, but the company's current-quarter outlook was weaker than expected, prompting Needham and Deutsche Bank to downgrade the stock to a "hold." At least six brokerage firms have lowered their price targets on Palo Alto Networks, as well, with Deutsche Bank offering the lowest target, at $150. The stock closed Thursday at $148.18, but is already 9.4% lower in pre-market trading. The shares had been recovering from an analyst-induced dip in mid-May, but ran smack into their 60-day moving average -- a trendline that served as resistance in late 2015. And PANW could be in for more trouble if bullish analysts continue to lower their ratings.

  • DECK is 2.5% lower ahead of the bell, following the company's fiscal fourth-quarter earnings results. Deckers Outdoor Corp also named a new CEO to replace the retiring Angel Martinez. The news was met with bearish brokerage notes, including a downgrade to "neutral" from "buy" at Citigroup, and price-target cuts from Evercore ISI, Credit Suisse, Brean Capital, and Susquehanna. DECK has shed almost 31% of its value over the last 12 months to trade at $49.25, and it appears options traders have been eyeing further losses. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.22 sits higher than 72% of the past year's readings.

  • SCTY is set to drop 1% at the open, potentially adding to its 53.5% year-to-date loss, after Deutsche Bank lowered its price target on the stock to $32 from $49. With SolarCity Corp's overhead 80-day moving average providing pressure, options trader are turning up their bearish bets. In fact, traders have bought to open nearly three SCTY puts for each call over the past 10 sessions on the ISE, CBOE, and PHLX, with the resulting put/call volume ratio of 2.67 ranking in the 88th percentile of its annual range. Pessimism also runs high outside of the options pits, where more than 40% of the stock's available float is now sold short.
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