Analyst Downgrades: Google, Alexion, and TripAdvisor

Analysts downwardly revised their ratings on GOOGL, ALXN, and TRIP

Jan 8, 2015 at 9:24 AM
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Analysts are weighing in today on tech titan Google Inc (NASDAQ:GOOGL), drugmaker Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and online travel issue Tripadvisor Inc (NASDAQ:TRIP). Here's a quick roundup of today's bearish brokerage notes on GOOGL, ALXN, and TRIP.

  • GOOGL got hit with a pair of downbeat analyst notes this morning. Specifically, Stifel cut its outlook to "hold" from "buy," while Evercore ISI slashed its price target by $50 to $675 (although the brokerage firm reiterated its "buy" rating). Since topping out at a record high of $615.04 last February, shares of GOOGL have surrendered nearly 18%, and closed last night at $505.15. Despite this negative price action, most analysts are upbeat, with 84% of those covering the shares maintaining a "buy" or better rating, and not a single "sell" to be found. Plus, the average 12-month price target of $642.99 sits in territory yet to be charted. Should Google Inc continue to struggle, an additional round of downgrades and/or price-target cuts could pressure the shares lower.

  • ALXN is more than 3% lower in electronic trading, after the company's experimental drug, eculizumab, failed to meet the main goal in a mid-stage trial. The news was met with a round of bearish brokerage notes, including one from Jefferies, which cut its price target to $161 from $170 -- and underscored its lackluster "hold" rating -- saying an approval for the drug from the Food and Drug Administration (FDA) is highly unlikely. Heading into today's session, the stock was sporting a 40.2% year-over-year lead, yet ALXN's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.46 ranks in the bearishly skewed 84th annual percentile. Given Alexion Pharmaceuticals, Inc.'s longer-term trajectory, a portion of this put buying may be a result of shareholders protecting paper profits against an unexpected slide.

  • Stifel downgraded TRIP to "hold" from "buy" ahead of the bell, echoing the majority of analysts covering the shares. This negative outlook isn't too surprising, considering the equity has shed more than 36% since hitting its all-time high of $111.24 in late June to trade at $70.84. More recently, the stock has underperformed the broader S&P 500 Index (SPX) by almost 18 percentage points over the past 60 sessions, yet traders have shown a preference for near-the-money calls over puts among options slated to expire in three months or less. Specifically, TRIP's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) is docked at a call-skewed 0.72. Should Tripadvisor Inc extend its downtrend, an unwinding of these short-term call positions could translate into more headwinds for the stock.

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