Analyst Downgrades: GameStop Corp., ITT Educational Services, Inc., and Nike Inc

Analysts downwardly revised their ratings and price targets on GameStop Corp. (GME), ITT Educational Services, Inc. (ESI), and Nike Inc (NKE)

by Alex Eppstein

Published on Aug 26, 2016 at 9:48 AM
Updated on Jun 24, 2020 at 10:16 AM

Analysts are weighing in on retailer GameStop Corp. (NYSE:GME), for-profit college operator ITT Educational Services, Inc. (NYSE:ESI), and Dow stock Nike Inc (NYSE:NKE). Here's a quick roundup of today's bearish brokerage notes on GME, ESI, and NKE.

  • GME is spiraling lower after the company's quarterly revenue came up shy of the consensus view, and Baird cut its price target to $40 from $42. Out of the gate, the stock is down 7.5% at $29.75, dragging its year-to-date lead to just 6%. These developments should be well-received by options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the past 10 weeks, speculators have bought to open 1.06 GameStop Corp. puts for every call, a ratio that ranks in the bearishly skewed 88th percentile of its 52-week range.
  • ESI is collapsing following the U.S. Education Department's ruling yesterday that the for-profit educator cannot enroll new students with federal aid. Making matters worse, Piper Jaffray lowered its rating to "underweight," and reduced its price target to zero. In early trading, shares of ITT Educational Services, Inc. have plunged 58% to $0.58, and are fresh off a record low of $0.54. While the stock remains on the short-sale restricted list following Thursday's sharp sell-off, already more than half of its float is sold short, as traders have all but given up hope on ESI.
  • NKE's rating was reduced to "neutral" from "buy" at B. Riley. As a result, the stock has lost 0.9% at $58.73, bringing its year-to-date deficit to 6%. At the ISE, CBOE, and PHLX, Nike Inc options traders have been unusually bullish, in spite of the stock's technical woes. Specifically, speculators have bought to open 2.71 NKE calls for every put, and the resulting call/put volume ratio ranks just 7 percentage points from an annual peak.
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