Schaeffer's Trading Floor Blog

Analyst Downgrades: Dendreon Corporation, MannKind Corporation, and magicJack VocalTec Ltd

Analysts issued bearish notes on DNDN, MNKD, and CALL

by 8/12/2014 9:15 AM
Stocks quoted in this article:

Analysts are downwardly revising their ratings today on biotech stocks Dendreon Corporation (NASDAQ:DNDN) and MannKind Corporation (NASDAQ:MNKD), plus VoIP provider magicJack VocalTec Ltd (NASDAQ:CALL). Here's a quick look at today's bearish brokerage notes on DNDN, MNKD, and CALL.

  • DNDN is down nearly 23% in pre-market action, after the company warned via a regulatory filing that it may not be able to meet $620 million in debt obligations due in January 2016. Following this news, Jefferies dropped its price target on Dendreon Corporation to $1.50 from $2 and backed its "underperform" rating, while Cowen and Company reduced its target to $2.33 from $2.55 and reiterated a "market perform" opinion. DNDN finished Monday's session at $2.12, down more than 29% year-to-date. In light of the stock's long-term underperformance, most brokerage firms are already firmly entrenched in the bearish camp. Not one of the 13 analysts tracking DNDN recommends buying it, and the average 12-month price target checks in at just $2.39.

  • In the wake of yesterday's big Afrezza deal, MNKD has been hit with a price-target cut to $13 from $16 at RBC, even as the brokerage firm backed its "outperform" rating. Shares of MannKind Corporation closed Monday at $8.53, but they've shed 2.7% ahead of the open -- chipping away at their year-to-date rise of 64%. Quite a few traders are betting on MNKD to fall, as no less than 29.6% of the stock's float is sold short. At the equity's average daily trading volume, it would take more than eight days for all of these bearish bets to be covered.

  • Following last night's second-quarter results, CALL was downgraded to "hold" from "buy" at Canaccord Genuity. The brokerage firm also cut its price target to $14 from $22, with the downwardly revised forecast representing a premium of just 7.3% to the stock's Monday close at $13.05. Ahead of the open, magicJack VocalTec Ltd has tumbled more than 10%, putting the security on pace to erase all of its 2014 gains. Traders seemed to be preparing for a negative earnings reaction from CALL, as the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.54 registers in the bearishly skewed 81st percentile of its annual range. What's more, short interest accounts for 54.2% of CALL's float.

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