NetApp Stock Gets Downgraded After Record High

The stock hit a fresh record peak of $94.42 last Friday

Oct 18, 2021 at 9:22 AM
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The shares of NetApp Inc. (NASDAQ:NTAP) are down 3.6% at $91.01 this morning, following a downgrade from Goldman Sachs. The analyst lowered its rating on NTAP to "sell" from "neutral," and slashed its price target to $81 from $85, citing the upcoming 2022 spending environment. 

This downgrade may come as a surprise to some, considering NetApp stock just hit a record high of $94.69, and has been charging up the charts for most of 2021. In fact, NTAP has added 42.5% this year, and has doubled in the past 12 month, while several channels of support still sit just below, including the 40-day moving average, which captured two pullbacks earlier this month, 

The majority of analysts in coverage are optimistic on NTAP, with nine of the 16 considering it a "buy" or better, heading into today. The remaining seven considered the stock a "hold." Meanwhile, the 12-month consensus price target of $95.32 is a slim 1.3% premium to last night's close. 

Options traders have also taken an optimistic stance. The equity's Schaeffer's put/call open interest ratio (SOIR) stands higher than just 1% of reading from the past year. This means short-term options traders have rarely been more put-biased. 

That being said, now could be a good time to speculate on NetApp stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 24% stands higher than just 12% of readings from the past year. This implies options traders are pricing in relatively low volatility expectations at the moment. 

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