Schaeffer's Trading Floor Blog

Analyst Downgrades: Aeropostale Inc, InterMune Inc, and Transocean LTD

Analysts downwardly revised their ratings on ARO, ITMN, and RIG

by 8/25/2014 9:14 AM
Stocks quoted in this article:

Analysts are weighing in today on teen apparel retailer Aeropostale Inc (NYSE:ARO), biotech firm InterMune Inc (NASDAQ:ITMN), and offshore drilling name Transocean LTD (NYSE:RIG). Here's a quick roundup of today's bearish brokerage notes on ARO, ITMN, and RIG.

  • Aeropostale Inc (NYSE:ARO) has plummeted 61.3% year-to-date -- including last Friday's guidance-related 10% loss -- to rest at $3.52. As such, RBC and Susquehanna slashed their respective price targets on the retailer to $5 (from $6) and $6 (from $8). This is more of the same for ARO, which has received considerable negative attention on the Street. Specifically, all 21 analysts covering the shares have given them a "hold" or worse rating.

  • Having tacked on 265.2% this year, InterMune Inc (NASDAQ:ITMN) is already near annual-high territory at $53.80, and appears ready to notch a fresh record high out of the gate, with the shares up roughly 36% ahead of the bell. This price action comes on the heels of Roche's $8.3 billion agreement to buy ITMN, which was announced over the weekend. Meanwhile, Stifel cut its rating on the equity to "hold" from "buy" -- though, on the flip side, Baird, Leerink, and William Blair each upped their price targets to $74, in line with Roche's per-share purchase price. Taking a step back, six out of nine covering analysts have given ITMN a "strong buy" recommendation, versus two "holds" and one "sell" opinion.

  • Finally, technical laggard Transocean LTD (NYSE:RIG) got hit with a $3 price-target cut to $34 at Susquehanna, which also affirmed its "neutral" assessment of the shares. This represents more than 10% downside from the stock's current perch at $37.97, and territory not explored in a decade. Bearish sentiment is nothing new for RIG. In fact, 19% of the stock's float is sold short, which would take nearly 13 sessions to buy back, at the shares' average daily trading levels.

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