The pharma giant also announced a dividend for the fiscal fourth quarter
Johnson & Johnson (NYSE:JNJ) stock is down 1.2% to trade at $188.54 at last glance, brushing off an earnings and revenue beat for the third quarter. The pharma company also announced it will spin off its orthopedics business, raised its full-year forecast, and issued a dividend for the fiscal fourth quarter. In response, UBS increased its price objective to $214 from $190.
Shares are taking a breather from their Oct. 9, record high of $192.10, which followed a bounce off long-term support at the 40-day moving average. The security still sports a 32% year-to-date lead, and appears to have found a new footing at the $185 region.
While calls outpace puts on an absolute basis, options traders have been more pessimistic than usual. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio sits higher than 80% of annual readings.
Options volume is already running at triple the intraday average amount so far today, with 10,000 calls and 5,143 puts exchanged. The most active contract is the October 192.50 call, followed by the 195 call in that same series.
Options are reasonably priced, per Johnson & Johnson stock's Schaeffer's Volatility Index (SVI) of 21% that ranks in the low 27th percentile of its annual range. This means options traders are pricing in low volatility expectations. JNJ also tends to outperform volatility expectations, as its Schaeffer's Volatility Scorecard (SVS) sits at 90 out of 100.