Facebook Stock Hit With Another Bearish Brokerage Note

Facebook stock has struggled since a late-July bear gap

by Emma Duncan

Published on Sep 18, 2018 at 10:13 AM

Shares of Facebook, Inc. (NASDAQ:FB) are lower in early trading after the stock got hit with its second bearish analyst note this month. J.P. Morgan Securities slashed its price target to $195 from $205, saying the social media giant's spending in 2019 will be higher as it invests in stronger privacy measures, and that FB is the "most controversial company" it's currently covering.

On the charts, the shares of Facebook stock have struggled to regain strength after a late-July post-earnings bear gap sent them retreating from their July 25 record high of $218.62. In fact, the FAANG stock is down more than 26% to trade near five-month lows. Nevertheless, the $160 region -- which coincides with the equity's negative 10% year-to-date return -- has recently emerged as a floor, with the shares last seen down 0.2% at $160.32.

Against this backdrop, the FAANG stock could be at risk of more bearish brokerage notes, considering 84% of analysts still maintain a "buy" rating on the equity. Plus, its average 12-month price target of $210.06 comes at a more than 30% premium to last night's close.  Earlier this month, MoffettNathanson issued a rare downgrade, sending FB stock down 2.6% that day.

Echoing the overall analyst outlook, near-term option traders are more call-skewed than usual. This is per FB's Schaeffer's put/call open interest ratio (SOIR) of 0.70, which ranks in the 21st percentile of its annual range. The September 185 call is home to peak open interest of 63,254 contracts, and data from the major options exchanges confirms notable buy-to-open activity here.

a schaeffer's exclusive


5 tips to leverage profits in this FREE insider report!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The IRS Loopholes Retirees Need to Know
Click to continue to advertiser's site.
Options Traders Blast SDC amd GOOS Stocks
SDC and GOOS options volume has ramped up today
Alibaba Stock Drops Amid Hong Kong IPO Buzz
Alibaba expects to raise up to $15 billion in its Hong Kong IPO
IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.