Analyst Downgrades: Netflix, Inc., Nike Inc, and SolarCity Corp

Analysts downwardly revised their ratings and price targets on Netflix, Inc. (NFLX), Nike Inc (NKE), and SolarCity Corp (SCTY)

Jun 20, 2016 at 9:29 AM
facebook twitter linkedin

Analysts are weighing in on streaming media giant Netflix, Inc. (NASDAQ:NFLX), athletic apparel retailer Nike Inc (NYSE:NKE), and solar energy stock SolarCity Corp (NASDAQ:SCTY). Here's a quick roundup of today's bearish brokerage notes on NFLX, NKE, and SCTY.

  • NFLX is pointed 1% higher ahead of the bell, despite a price-target cut to $115 from $125 -- still a 22% premium over the shares' Friday close at $94.45 -- at Nomura, which maintained its "buy" rating on the stock. Ahead of next month's second-quarter earnings report, the brokerage firm cited concern over both international and domestic user growth. Netflix, Inc. had been attempting to muscle back from a post-earnings bear gap in April, but ran into trouble at its 150-day moving average late last month. Nevertheless the majority of analysts rate NFLX a "buy" or better, and options traders have been unusually bullish of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 1.58 sits higher than 93% of the past year's readings.
  • NKE is also shaking off a bearish brokerage note amid broad-market tailwinds -- up 1.6% in electronic trading, despite BB&T lowering its price target on the stock to $70. Nike Inc closed at $53.71 on Friday, down 14% year-to-date. The shares have been on a steady downtrend since late March, and could be in for even more pain, should analysts lower their ratings. At the moment, 18 of the 26 brokerages following NKE give the stock a "strong buy" rating. Options traders, however, are already near a pessimistic extreme. NKE's 50-day put/call volume ratio on the ISE, CBOE, and PHLX ranks in the 98th percentile of its annual range, at 1.67.
  • SCTY is set to pop 2.6% at the open, even after Barclays downgraded the stock to "underweight," bucking the majority of analysts following SolarCity Corp. The shares have shed well over half of their value in 2016, as of their Friday close of $21.32, and short sellers have been betting on more losses. Currently 37.7% of SCTY's total float is sold short -- an increase of 20% during the two most recent reporting periods. Elsewhere, the company has expanded its solar power service to homeowners in Houston, Texas.
Sign up now for Schaeffer's Opening View newsletter to get a head start on all the major pre-market news!

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners