Analyst Downgrades: Restoration Hardware Holdings Inc, HP Inc, and Relypsa Inc

Analysts downwardly revised their ratings and price targets on Restoration Hardware Holdings Inc (RH), HP Inc (HPQ), and Relypsa Inc (RLYP)

Feb 25, 2016 at 10:10 AM

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Analysts are weighing in on retail interest Restoration Hardware Holdings Inc (NYSE:RH), tech stock HP Inc (NYSE:HPQ), and drugmaker Relypsa Inc (NASDAQ:RLYP). Here's a quick roundup of today's bearish brokerage notes on RH, HPQ, and RLYP.

RH sank 22.8% to $40.07 -- and just touched a two-year low of $38.25 -- after warning investors it would miss fourth-quarter earnings estimates when it reports in late March. Baird and Keybanc both downgraded the stock, to "neutral" and "sector weight," respectively, while no fewer than seven brokerages lowered their price targets. Restoration Hardware Holdings Inc has been struggling for months, giving up two-thirds of its value since its November peak at $106.49. There could be further downside ahead if more analysts jump ship; 11 out of 15 brokerage firms rate the security a "buy" or better, without a "sell" on the books.

After reporting fiscal first-quarter earnings shy of analyst estimates, and announcing plans to accelerate job cuts, HPQ received price-target cuts from Barclays, Deutsche Bank, BMO, and Jefferies, sending the shares down 7.5% to $10.01. BMO offered the lowest target at $12, but analysts have been bearish on HP Inc for quite some time. The stock hit a two-year low of $8.91 just two weeks ago, and it doesn't appear that near-term option traders have been expecting much of a rebound. HPQ has a Schaeffer's put/call open interest ratio (SOIR) of 1.21 -- in the 96th percentile of its annual range, indicating an extreme preference for puts over calls among options expiring in the next three months.

RLYP is 6.1% lower at $15.76, bringing its 2016 loss to 44.5%, after reporting a steeper-than-expected fourth-quarter loss. Wedbush and Stifel both lowered their price targets on Relypsa Inc, to $53 and $36, respectively -- still hefty premiums over the stock's current value. Today's fall could spook some bulls in the options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 4.5 RLYP calls for each put over the past two weeks.

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