Hewlett Packard Stock Slips After Goldman Sachs Downgrade

Puts are more popular than usual in the options pits

Deputy Editor
Nov 12, 2021 at 10:40 AM
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Hewlett Packard Enterprise Co (NYSE:HPE) is down 7% to trade at $14.83 at last check, after a downgrade from Goldman Sachs to "sell" from "neutral," in addition to a price-target cut to $14 from $16. The firm cited weaker spending on information technology (IT) in 2021 and 2022.  

After bouncing off familiar support at the $14.50 level in October, HPE has been charging higher, with help from its ascending 40-day moving average, which has swooped in to catch today's pullback. Just yesterday, the equity ran up to the $15.90 level, an area that rejected its early September rally as well. 

Coming into today, the majority of analysts were bullish on Hewlett Packard stock. Of the 10 in coverage, seven carried a "buy" or better rating, while three said "hold." Plus, the 12-month consensus price target of $17.61 is a 19.2% premium to current levels. 

Despite calls outnumbering puts on an absolute basis, puts have been much more popular than usual in the options pits. This is per HPE's 50-day put/call volume ratio of 0.33 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 98% of readings from the past year. 

This trend holds true today, with 1,298 puts across the tape so far, which is six times what's typically seen at this point. The most popular contracts are the November 15 put, and the weekly 12/3 14-strike put. 

 

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