Analyst Downgrades: AbbVie, Lululemon Athletica, Netflix

Analysts downwardly revised their ratings on ABBV, LULU, and NFLX

Oct 16, 2014 at 9:19 AM
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Analysts are weighing in today on drugmaker AbbVie Inc (NYSE:ABBV), yoga apparel designer Lululemon Athletica inc. (NASDAQ:LULU), and streaming content provider Netflix, Inc. (NASDAQ:NFLX). Here's a quick roundup of today's bearish brokerage notes on ABBV, LULU, and NFLX.

  • Just a day after wavering on its Shire PLC (ADR) (NASDAQ:SHPG) takeover bid, ABBV saw its price target slashed to $59 from $71 at BMO, which nevertheless reaffirmed its "outperform" rating. On the charts, it's been a forgettable year for the stock -- up just 3.4% to trade at $54.63. If this ho-hum price action continues, AbbVie Inc could be vulnerable to additional bearish brokerage notes. After all, five out of seven covering analysts still dole out "strong buy" ratings on the shares, and ABBV's consensus 12-month price target of $67.67 stands in territory never before charted. On the fundamental front, the company is slated to enter the earnings confessional sometime between Thursday, Oct. 23, and Monday, Oct. 27.

  • LULU has had a terrible year, shedding nearly one-third of its value to rest at $39.60. Macquarie responded to this technical trend by assuming coverage on the stock with an "underperform" rating and $34 price target. The firm isn't the only one that's bearish on Lululemon Athletica inc. Roughly 21% of the stock's float is sold short, which would take more than two weeks to buy back, at LULU's typical daily trading levels.

  • Finally, NFLX is poised to drop 26% out of the gate, after getting hit with a flurry of bearish brokerage notes on news of impending competition from HBO and disappointing new subscriber data. Specifically, the shares were slammed with nearly 20 price-target reductions -- and CRT Capital even cut its assessment to "fair value" from "buy." On the flip side, Jefferies raised its rating on Netflix, Inc. to "hold" from "underperform." Getting back to the technicals, this is a huge setback for the equity, which -- as of yesterday's close at $448.59 -- had advanced 21.8% year-to-date. Elsewhere, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been tilted in a bullish direction of late, per NFLX's 10-day call/put volume ratio of 1.10, which ranks in the 84th percentile of its 12-month range.
 

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