Schaeffer's Trading Floor Blog

Analyst Downgrades: Lululemon Athletica inc., Gogo Inc, and Finisar Corporation

Analysts downwardly revised their ratings on LULU, GOGO, and FNSR

by 6/13/2014 9:29 AM
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Analysts are weighing in today on yoga apparel retailer Lululemon Athletica inc. (NASDAQ:LULU), in-flight connectivity provider Gogo Inc (NASDAQ:GOGO), and telecom equipment maker Finisar Corporation (NASDAQ:FNSR). Here's a quick roundup of today's bearish brokerage notes.

  • LULU hit a new three-year low of $37.00 yesterday and closed the session 17.2% lower at $37.25, on a reduction to the company's full-year earnings forecast. As a result, a number of brokerage firms downwardly adjusted their positions; most recently, Wedbush downgraded the equity to "neutral" from "outperform" and cut its price target to $40 from $64, while J.P. Morgan Securities lowered its rating to "neutral." Elsewhere, 13 of the 25 analysts covering Lululemon Athletica inc. are hanging on to "buy" or better endorsements, and the average 12-month price target of $52.29 stands at a 40.4% premium to the shares' current perch.

  • Although GOGO has tacked on an impressive 43.2% in the last month alone to perch at $18.14, Wells Fargo initiated a tepid "market perform" rating on the equity this morning. Elsewhere, short interest on Gogo Inc climbed 5.2% during the most recent reporting period, bringing the total number of shares sold short to 12.7 million. This means close to 29% of the stock's float is sold short right now. The company will host its first-ever investor and analyst day on Wednesday, June 18.

  • Last night's weaker-than-expected fiscal fourth-quarter earnings report from FNSR led many brokerage firms to bearishly revise their outlooks on the stock, including Janney and Stifel, which each cut their price targets to $26 -- from $30 and $31, respectively -- this morning. As such, Finisar Corporation is poised to plunge more than 23% out of the gate from its current perch at $25.25. Heading into the quarterly announcement, 10 of the 11 covering analysts had dished out "buy" or better ratings, while the other maintained a "hold" suggestion. Furthermore, the consensus 12-month price target of $29.18 represents expected upside of 15.6% from the equity's current price.

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