Lyft Stock Drives Lower on Analyst Price-Target Cut

Call have been preferred over puts in recent weeks

by Emma Duncan

Published on Dec 3, 2019 at 9:46 AM
Updated on Jun 24, 2020 at 10:16 AM

Ride-hailing service Lyft Inc (NASDAQ:LYFT) is down 1.6% this morning at $46.63, sinking lower on the back of a late-night bear note from Piper Jaffray. Analyst Alexander Potter cut his price target by $19 to $60, though the adjustment still sits 26.6% above Monday night's close at $47.39.

Potter also stated that LYFT has a "more believable path to profitability," despite having less scale than Uber Technologies (UBER), Coming into today, 24 of 32 covering firms maintained a "buy" or "strong buy" recommendation on the shares.

LYFT has struggled to maintain positive momentum on the charts since its public trading debut in late March, and now sits roughly 35% below its $72 initial public offering (IPO) price. The equity has been in recovery mode since bottoming out at $37 in mid-October, however, with a handful of bull notes aiding its shift higher.

Meanwhile, LYFT calls have been getting the most attention in recent weeks. According to the stock's 10-day call/put volume ratio of 2.43 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than two calls have been purchased for every put during the past 10 days of trading.

Some of this call activity could be at the hands of shorts hedging against any additional upside risk. Short interest rolled back 9% during the past two reporting periods on Lyft stock, but these bearish bets still account for more than 7% of the security's total available float.


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