Citigroup downgrade DKS from "neutral" to "buy"
Dick's Sporting Goods Inc (NYSE:DKS) is up 0.7% to trade at $130.64 at last check, brushing off a Citigroup downgrade from "neutral" to "buy." The brokerage firm expects the sporting goods retailer to struggle with slowing demand, as well as lingering near-term margin pressures.
Citigroup is breaking away from the bullish analyst sentiment surrounding DKS. In fact, 11 of the 19 firms in coverage called the stock a "buy" or better, while eight rated it a "hold," coming into today. Meanwhile, the 9.05 million shares sold short make up 15.8% of the equity's available float.
Options bulls are taking today's downgrade with a grain of salt. In fact, 2,255 calls have been exchanged so far -- four times the intraday average volume -- compared to 1,168 puts. The most active contract is the 3/10 130-strike call, with positions being opened there.
Short-term options traders are overwhelmingly bearish, though. This is per Dick's Sporting Goods stock's Schaeffer's put/call open interest ratio (SOIR) of 4.09, which sits in the elevated 97th annual percentile, suggesting these traders have rarely been more put-biased.
A floor at the $128 level has contained the security's pullback from its Feb. 6, one-year high of $138.29, while the 40-day moving average has been supporting DKS since late December. Over the last nine months, Dick's Sporting Goods stock has added 60.8%.
