Schaeffer's Trading Floor Blog

Analyst Downgrades: Boston Scientific Corporation, GlaxoSmithKline plc (ADR), and Wal-Mart Stores, Inc.

Analysts downwardly revised their ratings on BSX, GSK, and WMT

by 7/29/2014 9:20 AM
Stocks quoted in this article:

Analysts are weighing in today on pharmaceutical firms Boston Scientific Corporation (NYSE:BSX) and GlaxoSmithKline plc (ADR) (NYSE:GSK), and big-box retailer Wal-Mart Stores, Inc. (NYSE:WMT). Here's a quick roundup of today's bearish brokerage notes.

  • Sterne Agee initiated coverage on BSX with a "neutral" rating. Taking a step back, analysts are divided over the stock, which has received 12 "buy" or better opinions, against 10 "holds." Meanwhile, on the charts, Boston Scientific Corporation has been in a holding pattern, largely churning between $12.50 and $14 since early January, but still managing a nearly 8% year-to-date gain to trade at $12.97.

  • Following new developments related to the conduct of two representatives in China, GSK was hit with four bearish brokerage notes, including a downgrade to "sell" from "buy" at Liberum, and price-target cuts at Barclays, Berenberg, and Morgan Stanley. This follows last Wednesday morning's weaker-than-expected second-quarter earnings report and reduced full-year outlook, which has led to a 9% dive during the subsequent four sessions. As a result of this recent sell-off, GlaxoSmithKline plc (ADR) -- currently perched at $48.20 -- is staring at a year-to-date deficit of nearly 10%. Short sellers have taken notice of the stock's struggles. GSK's short-interest ratio sits at 5.1, meaning it would take over a week for short sellers to buy back all of their bearish bets, at the equity's average daily trading volume.

  • Finally, WMT saw its rating cut to "neutral" from "buy" at Goldman Sachs earlier. Given the stock's 2014 deficit of roughly 4%, it's no surprise that the Street would temper its outlook on the retailer. Additional downgrades could be on the way, too, should Wal-Mart Stores, Inc. shares continue their recent pattern of lower highs and lows. After all, of the 19 analysts covering the stock, seven still maintain "strong buy" ratings, with another two doling out "buy" recommendations. On Monday, WMT closed at $75.71.

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