3 Reasons JPMorgan Downgraded Weight Watchers Stock

Short interest has more than doubled on WTW stock over the past two reporting periods

Stocks are mostly climbing higher today, as the Nasdaq looks to lock up its seventh straight win. Among individual names making notable moves are metal components maker NCI Building Systems Inc (NYSE:NCS), toy name Mattel, Inc. (NASDAQ:MAT), and dieting expert Weight Watchers International, Inc. (NASDAQ:WTW), all trading lower after bearish analyst attention. Here's a closer look at how the shares of NCS, MAT, and WTW are faring on the charts.

D.A. Davidson Downgrade Pressure NCS Stock

NCS shares are down 9.5% today at $6.95, making the stock one of the worst performers on the New York Stock Exchange, after D.A. Davidson downgraded its rating to "underperform" from "neutral." The brokerage firm also dropped its price target to $4 from $7.50. NCI Building Systems touched an all-time low of $6.66 on Dec. 26, and has given back roughly 54% in the past six months. Most analysts are already on sidelines, since the five of six in coverage had just "hold" ratings coming into today.

As for options activity, there's notable trading today at the weekly September 12.50 call, where it appears traders are buying to open positions. This would be just extending a recent interest in long calls, at least according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where 1,256 were purchased in the last two weeks, compared to 70 puts.

MAT Shares Extend Volatile Month

MAT stock got crushed on Friday due to the company's ugly 2019 guidance, and it's suffering more losses today, falling back to where it was before the toymaker's earnings bull gap earlier this month. At last check, the shares were down 2.4% at $13.49, as D.A. Davidson dropped its price target to $12.25 from $14, calling the company's fiscal year outlook "jaw-dropping." For the most part, Mattel has been trending lower on the charts since early 2014, with the shares touching their lowest point since March 2000 on Dec. 26 when they bottomed at $9.09, a price point that's roughly half their 52-week high.

Meanwhile, near-term options traders are very put-heavy on MAT. This is according to its Schaeffer's put/call open interest ratio (SOIR) of 2.32, a reading that ranks in the 96th annual percentile, revealing speculators targeting options expiring within three are unusually tilted toward puts.

Falling Daily Active Users Prompts WTW Downgrade

Weight Watchers is seeing its stock fall again, down 3% today at $29.37, and earlier hitting an annual low of $27.10. J.P. Morgan Securities just downgraded the equity to "underweight" from "neutral," and dropped its price target to $25 from $37, citing a sharp drop in daily active users, according to SimilarWeb data, on top of an increase in negative app reviews since the fall, and the growing popularity of competitors Noom and Diet Doctor.

The decline in WTW shares in recent months has been relentless, as they were trading above $100 as recently as July. A number of traders have been betting on more downside, since short interest more than doubled on the security over the past two reporting periods, putting 17% of the float in short sellers's hands.