Analyst Downgrades: athenahealth, SanDisk, Philip Morris

Analysts issued bearish brokerage notes on ATHN, SNDK, and PM

Oct 20, 2014 at 9:46 AM
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Analysts are downwardly revising their ratings on medical billing firm athenahealth, Inc (NASDAQ:ATHN), data storage solutions specialist SanDisk Corporation (NASDAQ:SNDK), and tobacco titan Philip Morris International Inc. (NYSE:PM). Here's a quick look at today's bearish brokerage notes on ATHN, SNDK, and PM.

  • ATHN's uninspiring third-quarter earnings report from last Thursday prompted a wave of price-target cuts from the brokerage bunch. Among those weighing in on the stock were Cowen, which slashed its price target by $10 to $134, and Goldman Sachs, which reduced its target price by $8 to $133, with both brokerage firms maintaining their equivalents of a "neutral" recommendation. On the charts, the security has struggled in 2014, and is currently staring at a 16% year-to-date deficit. Should the shares continue to struggle, another round of price-target reductions could be on the horizon. In fact, athenahealth, Inc's consensus 12-month price target of $147 not only stands at a steep 30% premium to the equity's current perch at $112.91, but also in territory not charted since mid-April.

  • Since hitting an all-time high of $108.77 in mid-July, SNDK has surrendered 21.4% to churn at $85.61 -- and Friday, the shares gave back 2.9% following a third-quarter earnings miss, a lower-than-expected current-quarter revenue outlook, and round of bearish brokerage notes. Nevertheless, the shares are rallying today, even in the wake of a price-target cut to $110 from $120 at Jefferies (although the brokerage firm reiterated its "buy" rating). Should the stock resume its longer-term downtrend, another round of bearish brokerage notes could pressure the shares lower. At present, 81% of covering analysts maintain a "buy" or "strong buy" recommendation toward the shares, and the consensus 12-month price target of $109.41 represents a lofty 27.8% premium to SNDK's present price.

  • Exane BNP Paribas reduced its price target for PM by 2% to $86 -- in line with the equity's current perch -- and underscored its "neutral" rating. On the charts, PM is off 1.3% year-to-date, and option traders think there is more downside ahead. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.17 ranks in the 97th percentile of its annual range. Simply stated, puts have been bought to open over calls on Philip Morris International Inc. with more rapidity just 3% of the time within the past year.

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