Bank of America downgraded PENN to "neutral" from "buy"
PENN Entertainment Inc (NASDAQ:PENN) stock is up 1.1% at $16.26 at last check, despite a downgrade from Bank of America to "neutral" from "buy." The brokerage firm changed its stance on the equity from growth opportunity to a "deep value turnaround."
The shares are not too far removed from their May 2, four-year low of $15, and last week found a ceiling at the 20-day moving average. PENN Entertainment stock is already down 39.3% so far this year, but the $15 region looks positioned to contain any additional losses.
Despite calls still outpacing puts, options traders are turning bearish toward PENN. This is per the equity's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all readings from the past 12 months.
Now looks like the right time to speculate with options, as the stock's Schaeffer's Volatility Index (SVI) of 48% sits in the relatively low 22nd percentile of readings from the past year. This indicates options traders are now pricing in lower-than-usual volatility expectations.