2 Stocks Sinking on Dismal Earnings; Plus, Abercrombie's Downgrade

DDD hit an annual low after the company's earnings miss and withdrawn outlook

Nov 1, 2017 at 10:04 AM
facebook twitter linkedin

Analysts are weighing in on apparel retailer Abercrombie & Fitch Co. (NYSE:ANF), three-dimensional printing company 3D Systems Corporation (NYSE:DDD), and video game maker Electronic Arts Inc. (NASDAQ:EA). Here's a quick roundup of today's bearish brokerage notes on ANF, DDD, and EA.

Abercrombie & Fitch Stock Drops on Downgrade

Abercrombie & Fitch stock is down 7.3% to trade at $12.45, after J.P. Morgan Securities downgraded ANF to "underweight" from "neutral," and cut its price target to $10 from $12.The brokerage firm said that, "With six years of negative same-store sales and market share loss coinciding with an improving consumer backdrop, we are increasingly concerned with ANF's competitive positioning."

Since sinking to a 17-year low of $8.81 on abandoned buyout plans in July, the security has climbed roughly 41% to trade back above its 200-day moving average. Nevertheless, the majority of analysts remain bearish toward the equity. Of the 14 brokerage firms following ANF stock, 12 rate it a "hold" or worse.   

Analyst Halves Price Target After 3D Systems Withdraws Outlook

Another stock taking a nosedive this morning is 3D Systems, last seen down 28% at $8.90, and earlier hit an annual low of $8.84, after the printing company reported a surprise third-quarter loss. In addition, 3D Systems withdrew its full-year outlook. As a result, BofA-Merrill Lynch downgraded the stock to "underperform" from "buy," and halved its price target to $10 from $20, joining at least four other brokerage firms in lowering their respective price targets.

DDD shares have been on a steady decline since hitting a two-year high of $23.70 on May 17, and short sellers are likely cheering today's plunge, though the stock is on the short-sale restricted (SSR) list. Short interest grew 7.3% during the two most recent reporting periods, to 28.86 million shares, which represents more than a quarter of the stock's total available float.

EA Dips on Disappointing Holiday Forecast

Shares of Electronic Arts are also moving lower this morning, last seen down 5% to trade at $113.54, after the video game maker's holiday-quarter revenue forecast narrowly missed estimates. As such, Barclays cut its price target to $127 from $129. The stock also received bullish analyst attention, however, from Jefferies, which upped its price target to $138 from $135 -- in uncharted territory.

Options traders seemed to have been betting on an earnings breakout from EA, too, as evidenced by its 10-day call/put volume ratio of 2.13 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- good enough to rank in the 75th annual percentile. In other words, options traders bought to open EA calls relative to puts at a faster-than-usual clip in recent weeks.


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!



Special Offers from Schaeffer's Trading Partners