Analyst Downgrades: PulteGroup, Inc., Ascena Retail Group Inc, and VeriFone Systems Inc

Analysts downwardly revised their ratings and price targets on PulteGroup, Inc. (NYSE:PHM), Ascena Retail Group Inc (NASDAQ:ASNA), and VeriFone Systems Inc (NYSE:PAY)

Sep 20, 2016 at 9:57 AM
facebook twitter linkedin

Analysts are weighing in on homebuilder PulteGroup, Inc. (NYSE:PHM), retail stock Ascena Retail Group Inc (NASDAQ:ASNA), and electronic payment processor VeriFone Systems Inc (NYSE:PAY). Here's a quick roundup of today's bearish brokerage notes on PHM, ASNA, and PAY.

  • PHM is down 2.9% at $19.30, as a dismal "underperform" initiation at Wedbush and plunging August housing starts outweigh solid earnings from sector peer Lennar Corporation (NYSE:LEN). This negative price action just echoes PulteGroup, Inc.'s recent trajectory, with the shares off nearly 14% from their late-July annual high at $22.40. Options traders have shown a preference for long calls over puts in recent months, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PHM's 50-day call/put volume ratio of 2.60 shows call buying nearly tripling put buying in recent weeks.
  • ASNA was hit with a barrage of bearish brokerage attention, after the retailer's fiscal fourth-quarter earnings and full-year forecast came in below estimates. Oppenheimer, FBR, and RBC, for instance, all downgraded the stock to the equivalent of a "neutral" rating, while no fewer than five brokerage firms lowered their price targets. Against this backdrop, shares of Ascena Retail Group Inc have sunk 25.6% to trade at $6.05 -- and are fresh off a seven-year low of $5.80. While the stock is short-sale restricted today, short sellers are likely cheering this post-earnings bear gap. Specifically, short interest accounts for a whopping 21.6% of ASNA's available float.
  • Morgan Stanley slashed its price target on PAY to $16 from $23. As such, the shares were last seen down 1.2% at $15.84 -- and earlier hit a three-year low of $15.74. Longer term, PAY has struggled mightily both on and off the charts, shedding 43% year-over-year. Nevertheless, options traders have been initiating long calls over puts at a near-annual-high clip of late. In fact, VeriFone Systems Inc's 10-day call/put volume ratio of 31.92 at the ISE, CBOE, and PHLX sits just 5 percentage points from a 52-week peak.
Find out where the Dow lands right after the closing bell. Sign up now for Schaeffer's Market Recap

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners