Analyst Downgrades: Gilead, Chipotle, and Myriad Genetics

Subtitle: Analysts

Feb 4, 2015 at 9:30 AM
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Analysts are weighing in today on drugmaker Gilead Sciences, Inc. (NASDAQ:GILD), burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG), and diagnostics firm Myriad Genetics, Inc. (NASDAQ:MYGN). Here's a quick roundup of today's bearish brokerage notes on GILD, CMG, and MYGN.

  • GILD is down nearly 9% in electronic trading, after the biotech offered up a lower-than-expected 2015 revenue forecast due to discounts for its hepatitis C drugs. The news was met with mixed reactions from the brokerage bunch, with Nomura, RBC, Piper Jaffray, and UBS cutting their respective price targets to $141, $118, $116, and $120. However, the stock received upwardly revised price targets from Guggenheim (to $143) and BMO (to $159). Technically speaking, GILD has performed well this year -- tacking on 13.7%, thanks to a lift from its 10-day moving average -- and closed last night at $107.18. Against this backdrop, sentiment around the Street has been skewed toward the bullish side. In fact, 76% of covering analysts maintain a "buy" or better rating, and Gilead Sciences, Inc.'s average 12-month price target of $122.58 sits in territory yet to be charted.

  • CMG received a round of price-target cuts, after the company reported fourth-quarter same-store sales and revenue that missed analysts' estimates -- sending Chipotle Mexican Grill, Inc. 6% lower in pre-market trading, and on pace to test its footing atop its year-to-date breakeven mark. Weighing in on the stock were Barclays, which reduced its target price by $20 to $730, and Wunderlich, which slashed its price target by $80 to $680 (just two days after upping its outlook). Sterne Agee, however, boosted its price target by $24 to $766, representing expected upside of 5.4% to Tuesday's settlement at $726.63, and a move into uncharted waters. On the sentiment front, options traders have shown a distinct preference for calls over puts in recent weeks, as evidenced by CMG's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.16, which ranks in the 88th annual percentile.

  • MYGN is bracing for a 16% drop out of the gate, following news the firm reduced its fiscal 2015 forecast and announced the retirement of CEO Peter Meldrum. Additionally, Myriad Genetics, Inc. received a handful of bearish brokerage notes, including one from Jefferies, which cut its price target by $5 to $32, and Mizuho, which lowered its target price by $18 to $32 and downgraded its outlook to "neutral" from "buy." JMP Securities, meanwhile, raised its rating to "market outperform" from "market perform." Heading into today's session, the stock was boasting a nearly 12% year-to-date gain, and settled last night at $38.12. As such, today's projected move lower is likely to please short sellers. Short interest on MYGN accounts for 42.6% of the stock's available float, and would take more than six weeks to cover, at average daily trading levels.

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