Analyst Downgrades: Juniper Networks, Inc., Level 3 Communications, Inc., and Vertex Pharmaceuticals Incorporated

Analysts downwardly revised their ratings and price targets on Juniper Networks, Inc. (NYSE:JNPR), Level 3 Communications, Inc. (NYSE:LVLT), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Josh Selway

Nov 1, 2016 at 10:07 AM

Analysts are weighing in on tech issue Juniper Networks, Inc. (NYSE:JNPR), telecommunications stock Level 3 Communications, Inc. (NYSE:LVLT), and biotech Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). Here's a quick roundup of today's bearish brokerage notes on JNPR, LVLT, and VRTX.

JNPR was hit with a downgrade to "underweight" at Morgan Stanley, and now the stock is down 1.6% at $25.92 in early trading. Although Juniper Networks, Inc. is sitting in a 6.1% year-to-date hole, the stock just closed above its 10-month moving average for a second straight month. Options traders certainly wouldn't mind seeing extended upside in the near term. For instance, call buying has more than tripled put buying during the past 50 sessions at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Moreover, the resulting 10-week call/put volume ratio of 3.15 sits just 9 percentage points from an annual bullish high.

Analysts are weighing in on LVLT following yesterday's huge M&A development. Most notably, Goldman Sachs removed the stock from its "Americas Conviction Buy" list, and lowered its outlook to "neutral" from "buy," but raised its price target to $60 from $55. RBC, Jefferies, and BTIG also cut the stock to the equivalent of a "hold." At last check, Level 3 Communications, Inc. was down 3.4% at $54.24, and there's room for more bearish brokerage notes to come down the pipes. Currently, 10 of 15 firms rate the stock a "buy" or "strong buy."

VRTX slipped to a fresh two-year low of $73.31 out of the gate, and was last seen off 0.2% at $75.71, after William Blair downgraded the stock to "market perform" and lowered its price target to $81. It's been nothing but pain for VRTX shares since their most recent high of $103.73, seen in August, falling 27% since then. As a result, short-term options traders have taken an unusually put-skewed approach, per Vertex Pharmaceuticals Incorporated's Schaeffer's put/call open interest (SOIR) of 1.09, which ranks in the 78th percentile of its annual range.

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