Aircraft Stock Flies Lower on Analyst Bear Note

Berenberg downgraded the stock to "hold" from "buy"

by Laura McCandless

Published on Jun 23, 2020 at 2:22 PM
Updated on Jun 24, 2020 at 10:16 AM

Spirit AeroSystems Holdings Inc (NYSE:SPR) is taking a tumble on the charts, down 14.8% at $23.17 at last check. This drop comes after Spirit asked lenders for their financial support, following a request from Boeing (BA) that the aircraft designer reduce its 2020 production in light of the impact COVID-19. This lack of demand translates to uncertainty for the aerospace company, as a great deal of its revenue comes from manufacturing structures for Boeing. In response, Berenberg downgraded SPR to "hold" from "buy."

Today's dip has the descending 80-day moving average, which has curbed several of the stock's pullbacks in the last week, flip-flopping into resistance above the $25 region. Currently, the equity is down 68% year-to-date. 

SPR

Berenberg is joining a slew of analysts bearish on SPR, with 12 of the 13 analysts in coverage sporting a "hold" or worse rating. Meanwhile, the stock is right in line with its 12-month consensus price target of $23.79. 

Despite the analyst hesitance, calls are popular in the options pits. In the past 10 weeks, 7.05 calls have been bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 84% of readings from the past year. Today, 7,972 calls have crossed the tape so far, in comparison to 3,712 puts, though put volume is three times what's typically seen. Most popular is the July 25 call, followed by the July 20 put, with new positions being opened at both. 

 


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