WDAY, RH, WLL Stocks Downgraded Today

Rh shares are short-sale restricted following the retailer's ugly forecast

Jun 2, 2017 at 10:10 AM
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Analysts are weighing in on software stock Workday Inc (NYSE:WDAY), home furnishings retailer RH (NYSE:RH), and oil-and-gas issue Whiting Petroleum Corp (NYSE:WLL). Here's a quick roundup of today's bearish brokerage notes on shares of WDAY, RH, and WLL.

WDAY Stock Swings to New High After Earnings

After taking an initial dip at the open, Workday stock was last seen trading up 0.8% at $102.29, fresh off a three-year high of $103.69, after the company's first-quarter earnings results topped expectations. While a number of analysts raised their price targets, BTIG lowered its rating to "neutral," and Citigroup cut its price target to $72 from $77. The shares are now up 55% year-to-date, and WDAY options traders should be pleased. WDAY stock has a Schaeffer's put/call open interest ratio (SOIR) of 0.50, which is just 4 percentage points from a 12-month low, revealing a strong call-skew among short-term options traders. 

RH Stock Sinks on Ugly Forecast

RH last night cut its full-year profit outlook, and the shares are getting crushed in response. RH stock was last seen down 26% at $42.35 -- on track for its worst day in putting it more than a year, and putting it on the short-sale restricted list. Meanwhile, Telsey Advisory Group lowered its price target to $48 from $56, and Deutsche Bank cut its target to $45 from $50. Despite the drop, RH stock is still trading comfortably above its year-to-date breakeven level near $30.

Nevertheless, RH options traders were growing defensive ahead of earnings. RH's 10-day put/call volume ratio of 3.91 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is just 4 percentage points from a 12-month high, meaning puts have been bought to open over calls at a near-annual-high clip.

WLL Stock Hit with Another Downgrade

Whiting Petroleum stock is on the receiving end of another analyst downgrade, with Credit Suisse lowering its rating to "neutral" from "outperform." WLL was last seen 2.7% lower at $6.78, bringing its year-to-date slide to nearly 44%. Data suggests it's a good time to buy Whiting Petroleum options, whether it be calls or puts. This is according to WLL stock's Schaeffer's Volatility Index (SVI) of 66%, which ranks below 96% of all readings from the past year, suggesting low volatility expectations are being priced into near-term options. 

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