Schaeffer's Trading Floor Blog

Analyst Update: Ford Motor Company, Chipotle Mexican Grill, Inc., and VIVUS, Inc.

Analysts adjusted their ratings on F, CMG, and VVUS

by 2/6/2013 11:11 AM
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With investors again in a tempered selling mood, analysts have been busy sharing their opinions on a variety of names. Some companies seeing analyst adjustments today include American automaker Ford Motor Company (NYSE:F -13.11), burrito king Chipotle Mexican Grill, Inc. (NYSE:CMG - 316.66), and biopharmaceutical company VIVUS, Inc. (NASDAQ:VVUS - 13.12).

  • F has declined 8.3% from its Jan. 15 annual peak of $14.30, and analysts are taking note. This morning, Ameriprise Financial lowered its rating of the stock to "sell" all the way from "buy." Prior to this move, F had a relatively mixed analyst backdrop, with six "strong buy" and two "buy" ratings, six "holds," one "sell," and one "strong sell." In the meantime, short sellers have been bailing out of the stock even as the shares retreat. In fact, during the last two reporting periods, the number of shorted F shares has shrunk by more than 50%.

  • After reporting a 6.8% rise in fourth-quarter earnings last night, CMG shares have jumped higher today. Before the open, Lazard upped its price target on the shares to $393 from $388, while Wedbush adjusted its outlook to $310 from $290. Also, Credit Suisse also raised its target to $330 from $300 but kept its rating at "neutral." Although CMG has gained 6.5% in 2013 so far, it is still roughly 15% lower on a year-over-year basis. The stock's recent pop higher could send short sellers to the exits, however, spurring a short-covering rally. Currently, almost 12% of the equity's float has been sold short, and it would take more than nine trading days to cover all CMG shorted positions (at the stock's average daily volume).

  • Finally, Leerink Swann resumed coverage on VVUS today with an "outperform" rating. Overall, analysts appear quite optimistic on the company's prospects; the average 12-month price target, according to Thomson Reuters, is $20.30, or roughly 57% above yesterday's closing price of $12.96. Options players are hopeful as well, as evidenced by the 10-day call/put volume ratio measuring activity on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the past two weeks, option traders have bought to open nearly 8.5 calls for every put. This ratio is higher than 89% of all readings from the past year, suggesting call buying has been more popular than usual in recent sessions.

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