NVDA Slammed With Rare Bear Note Before Earnings

Analysts were overwhelmingly bullish coming into today

by Emma Duncan

Published on Nov 8, 2018 at 10:00 AM

Shares of Nvidia Corporation (NASDAQ:NVDA) are notably lower in early trading, after early this morning Morgan Stanley slashed its price target to $260 from $273. This bear note comes just ahead of the chip stock's third-quarter earnings report, which is scheduled for after the market closes, next Thursday, Nov. 15. In response, NVDA is down 2.7% at $207.89, at last check.

On the charts, Nvidia stock is continuing to recover from its late-October lows, a steep sell-off that came immediately after its Oct. 2 record peak of $292.76. As of last night's close, the shares had managed to move back above the positive 10% year-to-date level, though now they're back below this price point. Notably, the 50-day moving average for the security stands all the way up at $250.45.

In terms of options trading, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows NVDA with a 10-day call/put volume ratio of 1.80, ranking in the 79th percentile of its annual range. In other words, calls have been purchased over puts at a faster-than-usual clip.

Rounding back to analyst sentiment, today's bear note seems to be a rarity for the chip stock. Currently, 16 of the 24 firms following Nvidia stock sport "buy" or "strong buy" recommendations. Plus, the security's average 12-month price target of $290.32 stands at a 35.8% premium to current levels.

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