Analyst Downgrades Rattle 2 More Athletic Apparel Stocks

Infosys options traders have been unusually bullish in recent months

Aug 21, 2017 at 9:36 AM
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Analysts are weighing in on athletic apparel stocks Nike Inc (NYSE:NKE) and Finish Line Inc (NASDAQ:FINL), as well as tech concern Infosys Ltd ADR (NYSE:INFY). Here's a quick roundup of today's bearish brokerage notes on shares of NKE, FINL, and INFY.

Nike Stock Testing Support After Sector Swoon

Athletic apparel stocks took it on the chin last week, after several retailers reported disappointing earnings. This morning, NKE stock is 2.5% lower at $53.50, after Jefferies downgraded the shares to "hold" from "buy," and trimmed its price target to $60 from $75. However, Nike stock could find support at its 200-day moving average.

Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.16 is in the 74th percentile of its annual range, suggesting near-term options traders are more put-heavy than usual. In the newly front-month September series of options, the 55 strike is home to peak put open interest, which could act as an added layer of short-term support for Nike stock.

FINL Short Selling Ramps Up Amid Stock Weakness

Shares of Finish Line are down 8.5% at $10.06 -- a new seven-year low -- after Monness Crespi Hardt downgraded the stock to "neutral" from "buy." The shares were already off 41% heading into today's trading, and though the stock is short-sale restricted today, it's likely short interest on Finish Line stock will only continue to increase. These bearish bets jumped by almost 12% in the last reporting period alone, and now account for one-fourth of the equity's float. 

INFY Stock Burns Options Bulls

Infosys stock suffered heavy losses last week following the resignation of the company's CEO. INFY is down another 5.1% today at $14.04, after a number of brokerages weighed in on the security, including J.P. Morgan Securities, which downgraded Infosys to "neutral" from "overweight."

Options traders, however, have been unusually bullish toward the shares. The equity's 50-day call/put volume ratio of 2.85 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks just 2 percentage points from a 12-month high. This means call buying has been unusually popular, relative to put buying. 

 

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