Schaeffer's Trading Floor Blog

Analyst Downgrades: Alcatel Lucent SA (ADR), 3D Systems Corporation, and Valeant Pharmaceuticals Intl Inc

Analysts downwardly revised their ratings on ALU, DDD, and VRX

by 8/1/2014 9:30 AM
Stocks quoted in this article:

Analysts are weighing in today on France-based networking name Alcatel Lucent SA (ADR) (NYSE:ALU), 3-D printing expert 3D Systems Corporation (NYSE:DDD), and specialty drug maker Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on ALU, DDD, and VRX.

  • ALU has had a rough 2014, down 22% so far, and gapping 10.7% lower yesterday to finish at $3.43, as weaker demand for its core networking products eclipsed an earnings report that largely met expectations. Alcatel Lucent SA (ADR) was subsequently slapped with price-target cuts from MKM Partners (to $4 from $4.50), Nomura (to 3.50 euros from 4 euros), and SocGen (to 3 euros from 3.25 euros) -- though Deutsche Bank upped its own target slightly to 2.90 euros from 2.80 euros. In general, the Street has taken a mixed view of the shares. While 60% of covering analysts have given the stock a "hold" or worse rating, ALU's consensus 12-month price target of $4.79 stands at a roughly 40% premium to current trading levels.

  • DDD shed 10.6% yesterday to close at $50.13, following a lackluster quarterly earnings report. These technical troubles prompted a round of bearish notes from no fewer than six brokerage firms, including downgrades today from RBC (to "sector perform" from "outperform") and Piper Jaffray (to "neutral" from "overweight"). Additional downgrades could be on the way, too, as two-thirds of 3D Systems Corporation's 15 covering analysts have handed out "buy" or better recommendations. In addition, the stock's consensus 12-month price target of $63.84 represents a 27.3% premium to Thursday's closing price.

  • Finally, VRX suffered a nearly 7% loss yesterday and closed at $117.39, after the firm cut its full-year profit and revenue forecast. As a result, the company saw its price target slashed at Cantor (to $167 from $209), CIBC (to $155 from $160), Piper Jaffray (to $135 from $151), and Susquehanna (to $160 from $170). Meanwhile, short sellers were likely cheering Valeant Pharmaceuticals Intl Inc's Thursday sell-off; 6.3% of the equity's float is sold short, which would take more than 13 sessions to cover, at VRX's typical daily trading volume.

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