Analyst Downgrades: Rocket Fuel, ARIAD, Nordstrom

Analysts downwardly revised their ratings on Rocket Fuel Inc (FUEL), Ariad Pharmaceuticals, Inc. (ARIA), and Nordstrom, Inc. (JWN)

Feb 20, 2015 at 9:41 AM
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Analysts are weighing in today on artificial intelligence developer Rocket Fuel Inc (NASDAQ:FUEL), drugmaker Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), and retailer Nordstrom, Inc. (NYSE:JWN). Here's a quick roundup of today's bearish brokerage notes on FUEL, ARIA, and JWN.

  • FUEL hit a fresh record low of $10.80 out of the gate -- but was last seen 24% lower at $11.22 -- after the company's fourth-quarter revenue miss and dreary current-quarter forecast was met with a round of downbeat analyst notes. Evercore ISI, for instance, slashed its price target to $8 from $19, saying FUEL's recent purchase of X+1 was "not enough to offset accelerating declines in core growth." Elsewhere, Needham cut its rating on the stock to "hold" from "buy," while BMO reduced its price target by $6 to $12. Heading into today's session, the stock was already staring at a 72% year-over-year deficit, and more bearish brokerage notes could be on the horizon. The majority of analysts covering Rocket Fuel Inc maintain a "buy" or better rating, with not a single "sell" to be found. Additionally, FUEL's average 12-month price target of $21.59 is more than double the equity's current perch.

  • William Blair reduced its price target on ARIA by $1 to $11 -- but reiterated its "outperform" rating -- following news that Sarissa Capital Management LP is calling for the dismissal of the company's CEO Harvey Berger. Technically speaking, the stock has been a long-term laggard, shedding 17% over the past 52 weeks to trade at $7.36. Not surprisingly, sentiment both in and out of the options arena is skewed toward the skeptical side. For starters, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been initiating long puts over calls at a faster-than-usual clip in recent weeks. Elsewhere, more than one-quarter of Ariad Pharmaceuticals, Inc.'s float is sold short.

  • As expected, JWN is up more than 1% at the open, following its turn in the earnings confessional. In fact, today's price move comes despite the firm turning in lower-than-expected fourth-quarter earnings, and the equity receiving no fewer than four price-target cuts. Deutsche Bank, for instance, reduced its price target by $1 to $82, while Cowen and Company cut its price target by $4 to $87. Both of these newly revised targets still represent expected upside to the equity's present perch at $78.20, though. On the charts, the security has been a strong performer over the past 52 weeks, adding nearly 30%. In the options pits, though, short-term speculators have shown a preference for puts over calls, as evidenced by Nordstrom, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 1.11, which ranks higher than 72% of similar readings taken in the past year.
 

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