Retail names M and JWN are getting hit with price-target cuts after falling short of sales expectations
Analysts are weighing in on IT security specialist CyberArk Software Ltd (NASDAQ:CYBR), department store operator Macy's Inc (NYSE:M), and upscale retailer Nordstrom, Inc. (NYSE:JWN). Here's a quick roundup of today's bearish brokerage notes on shares of CYBR, M, and JWN.
CyberArk Earnings, Conjur Acquisition Spark Downgrade
CBYR shares have tumbled nearly 8% ahead of the bell following last night's earnings report. The Israeli online security firm topped first-quarter earnings and revenue estimates, but its second-quarter guidance for adjusted earnings of 23 to 25 cents per share on $61-62 million in revenue fell short of the consensus analyst forecast. Separately, CyberArk announced a deal to acquire Conjur for $42 million in cash.
In response, Summit Redstone downgraded CYBR stock to "hold." It's a rare bearish note for the equity, which has garnered 15 "buy" or better endorsements out of 18 total recommendations. As of Thursday night's close at $55.15, CYBR had notched a solid year-to-date gain of 21% -- but today's steep pullback from familiar resistance around $55 could easily elicit further downgrades or price-target cuts.
Price-Target Cuts Roll In After Macy's Post-Earnings Sell-Off
Analysts are lowering their expectations en masse after Macy's on Thursday confessed to a 5.2% drop in same-store sales during the first quarter. Jefferies and Cowen both lowered their M price targets yesterday, and today, five more target cuts have come through -- including a Citigroup slash to $23 from $30, which implies expected downside of 5.5% to Thursday's close at $24.35.
In the wake of its drastic post-earnings bearish gap, M stock is trading fractionally higher in electronic action. Short selling was restricted on Macy's shares yesterday, which may have helped drive bears into the retailer's options; Thursday's put volume of 81,592 contracts represented a new 52-week high, according to Trade-Alert.
JWN Joins the Ranks of Struggling Retail Stocks
After the closing bell sounded on Thursday, Nordstrom reported an unexpected decline in same-store sales for the first quarter, even as revenue for the period topped expectations. Analysts at J.P. Morgan responded by lowering their JWN price target to $35 from $41, while Maxim cut its target on the stock to $56 from $61.
JWN settled at $46.21 last night, but is set to open more than 5% lower. This big drop will push Nordstrom stock south of its 50-day moving average for the first time in over a month. It looks like short sellers were the smart money ahead of JWN earnings, with nearly one-quarter of the stock's float dedicated to short interest.