SHOP Stock Fails to Shake Off Downgrade

D.A. Davidson cut its price target yesterday, but remained optimistic in the long-term

Deputy Editor
Apr 7, 2020 at 10:29 AM
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Shopify Inc (NYSE: SHOP) is down 2.5% to trade at $380.36 this morning, succumbing to a downgrade from Raymond James to "market perform" from "outperform." This comes just one day after D.A. Davidson cut its price target to $500 from $675. The latter did maintain its "buy" rating, calling SHOP "one of the most attractive long-term open-ended growth" holdings. 

The analyst chatter surrounding SHOP recently has been deafening, with several analysts in coverage slashing their price targets just last week. Coming into today, SHOP held 13 "hold" or worse ratings, and 11 "buy" or better recommendations. Meanwhile, the 12-month consensus target price of $496.32 is a 26.7% premium to current levels. 

SHOP has had a rocky ride, alongside the broader market, since its mid-February record high of $593.89. Today's attempt at a breakout was curbed by its 30-day moving average, which has kept a cap on the shares since early March. 

Since we last checked in with SHOP, puts are still incredibly popular. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.33 puts have been bought for every call in the past 10 days. This ratio sits in the 94th percentile of its annual range, suggesting a heavier-than-usual appetite for long puts of late. 

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