Hanesbrands Stock Unravels After Double Downgrade

Wells Fargo downgraded the equity to "underweight" from "overweight"

Undergarment manufacturer Hanesbrands Inc. (NYSE:HBI) is off to a rocky start for 2020 after Wells Fargo cut its rating to "underweight" from "overweight," and slashed its price target to $12 from $15. In response, the stock is down 1.6% to trade at $14.59, set for its lowest close in over a week.

It's been a gradual slope downwards for HBI since the security ran into a familiar ceiling at its $16.50 region, which happens to coincide with its 200-day moving average, back in late-October. Since then the stock has lost over 10%. For 2019, however, the equity added 18.5%.

Sentiment surrounding Hanesbrands has been pretty lukewarm. Prior to today, five of the eight analysts in coverage called the stock a "hold," while only two called it a "strong buy." The consensus 12-month price target of $17.50, on the other hand, is at a 17.9% premium to current levels.

This sentiment has been echoed in the options pits, where puts have doubled calls during the past 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). What's more, this ratio sits higher than 72% of readings from the past year, suggesting a bigger-than-usual appetite for bearish bets of late.