CPRI options volume is running at 21 times the average intraday clip
Retail staple and Michael Kors owner Capri Holdings Ltd (NYSE:CPRI) missed fiscal third-quarter top- and bottom-line expectations, sending the shares 26.7% lower this afternoon to trade at $48.59, on track for its worst single-session loss since March 2020.
Options traders are weighing in on the plunge, with 14,000 calls and 9,883 puts traded halfway through today's session -- volume that's 21 times the amount typically seen at this point. New positions are being opened at the five most popular contracts, headed by the February 50 call, indicating these traders are betting on today's losses to be a floor.
The company also cut its annual profit forecast and offered a gloomy outlook for 2024. Capri chalked its dismal results up to a slowdown in demand for luxury handbags and apparel, as target demographics failed to weather decades-high inflation.
There's a penchant for bearish bets in the options pits, per the stock's 10-day put/call volume ratio of 1.25 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 80th annual percentile. In other words, puts have been bought to open over calls at a quicker-than-usual clip.
Not a single analyst has chimed in with a price-target cut or downgrade, which is notable because, of the 14 in coverage, 11 rate Capri stock a "buy" or better, while the consensus 12-month CPRI price target of $67.17 is a 37% premium to the stock's current perch.