Along with tech titan Apple (AAPL), several other stocks in the sector are lower after negative analyst notes. Of note, Juniper Networks, Inc. (NYSE:JNPR), NetApp Inc. (NASDAQ:NTAP), and F5 Networks, Inc. (NASDAQ:FFIV) stocks are all in the red today, after analysts downgraded the equities to "sell." What's more, the ugly brokerage attention has sparked unusual options volume on JNPR, NTAP, and FFIV stocks.
Citigroup cut Juniper Networks' rating to "sell" from "neutral," and sliced its price target to $24 from $28. The brokerage firm said second-half expectations are too "lofty," and trimmed its financial projections accordingly. Citi also cited increasing competition from Cisco Systems (CSCO) and Arista Networks (ANET) for the downgrade.
JNPR shares are down 3.1% to trade at $26.50, back below their year-to-date breakeven. The equity enjoyed an impressive 8.2% rally in June -- its best month since May 2018 -- but stopped short of its 200-day moving average.
At last check, the security has already seen more than 2,700 put options change hands -- 18 times the average intraday volume. Meanwhile, about 3,400 calls have traded so far -- seven times the norm. Most active is the weekly 7/26 27.50-strike call, which has seen some buy-to-open action. By purchasing the calls to open, the buyers expect JNPR shares to bounce back above $27.50 by the close on Friday, July 26, when the options expire.
Citigroup also downgraded NetApp stock to "sell" from "neutral," and cut its price target to $55 from $67 -- representing a discount to current levels. The analyst cited increasing competition from Dell (DELL) and Pure Storage (PSTG), among others, and expects margin pressures and an unfavorable macro environment to impact NTAP.
NTAP shares are down 3.9% to trade at $59.98. The stock has struggled since a post-earnings bear gap in late May, and is now testing a floor around its year-to-date breakeven level. However, NetApp has historically been one of the best stocks to own in the third quarter, averaging a gain of 12.5% over the past 10 years.
So far today, about 2,200 NTAP calls have traded -- six times the average intraday volume, and nearly three times the number of puts exchanged. The September 65 and 70 calls are most active, with one trader possibly closing a bull call spread at the strikes.
Finally, F5 Networks was slapped with a downgrade to "sell" from "neutral" at Goldman Sachs, which reduced its price target to $120 from $165 -- also a discount to current levels. The brokerage firm cited a "weaker short-term spending environment and increasing competitive threat."
FFIV shares were last seen 4.5% lower at $141.01. After touching an annual low of $131.53 on May 31, the equity went on to rally more than 10% in June, marking its best month since August 2018. From a longer-term perspective, however, FFIV has been in a channel of lower highs and lows since peaking just below $200 in late September.
In the options pits, the stock has seen close to 400 puts cross the tape so far, representing three times the average intraday volume. For comparison, fewer than 200 calls have traded. It appears some traders are expecting more downside for FFIV, buying to open the weekly 7/12 139-strike put, which expires at the close this Friday.
Don Kaufman delivers what readers are calling 'HIS BEST YET!' In this exclusive Guide, Don will give you ALL the secrets he's taught millions of other traders to help guide them along in their successful options trading journey...
Now, this is NOT for those who only want to make a HALF attempt...nope...this is ONLY for those serious about becoming a better trained, more profitable, and long term options trader!
If that's YOU...Download Your Copy below: