Home Depot Stock Downgraded at Credit Suisse

Lousy housing data has weighed on HD stock

Oct 17, 2018 at 10:13 AM
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Home Depot Inc (NYSE:HD) is trading down 2.4% at $188.90, after Credit Suisse downgraded the stock to "neutral" from "outperform" and reduced its price target to $204 from $222. The brokerage firm cited disappointing data out of the housing sector, and it's certainly not helping that housing starts in September just fell by more than expected.

HD shares are pacing for their lowest close since June 1, falling further below the recently breached 200-day moving average in the process. Looking back, the blue chip is up 15.5% year-over-year, and hit an all-time high of $215.43 on Sept. 12.

The weakness in recent price action is likely bad news for options traders, who've been scooping up calls at a notable pace. For instance, the 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 2.35 and ranks in the 77th annual percentile, showing an unusual interest in call buying. Moreover, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.63 is standing at an annual low.

Sentiment is also upbeat in the analyst community, save today's downgrade. By the numbers, 21 of 26 brokerage firms have "buy" or "strong buy" ratings on Home Depot.


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