"Sell" Rating Sinks CenturyLink Before Earnings

CenturyLink earnings are due out later today

by Josh Selway

Published on Nov 6, 2019 at 10:11 AM

CenturyLink, Inc. (NYSE:CTL) is trading down 4.1% today at $13.11, after a bearish analyst note came through just before the company's post-close earnings release today. Guggenheim downgraded the shares to "sell" from "neutral," saying the company should consider suspending its dividend as margin pressure will begin to catch up with it.

Most analysts are already on the skeptical side with CTL, with nine of 12 handing out "hold" recommendations. Options traders are also positioned somewhat bearishly, based on the Schaeffer's put/call open interest ratio (SOIR) of 1.47, which ranks in the 84th annual percentile. In short, near-term options traders are unusually put-skewed.

Short interest remains high, too, accounting for almost two weeks' worth of buying power, based on average trading volumes. CTL had been putting pressure on bears in recent weeks, yesterday rising to its highest point since February, putting its 14-day Relative Strength Index (RSI) into overbought territory at 71.

What's more, the earnings history for CenturyLink favors the pessimists, since it's closed lower the day after reporting in four straight quarters. The options market is pricing in a 12.7% next-day swing for the shares, which would be more volatile than the two-year average post-earnings move of 8.8%.

 

 


A Schaeffer's exclusive

11 Stocks to Buy Before Leap Day

Access your FREE insider report before it's too late!


 
 

Partnercenter


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


Legendary Stock-Picker Calls Top Stock of 2020
Matt McCall's picks were met with disbelief... Until five soared over 1,000%. Get his latest 2020 pick.
bluebird bio Sinks on Earnings, Application Setback
BLUE has shed 40% over the past 12 months
2 Stocks Down on M&A Buzz
Options traders preferred puts on LC
Legendary Stock-Picker Calls Top Stock of 2020
Matt McCall's picks were met with disbelief... Until five soared over 1,000%. Get his latest 2020 pick.