Analyst Downgrades: SanDisk Corporation, MannKind Corporation, and ArcelorMittal SA

Analysts downwardly revised their ratings on SanDisk Corporation (SNDK), MannKind Corporation (MNKD), and ArcelorMittal SA (ADR) (MT)

by Karee Venema

Published on Apr 16, 2015 at 9:22 AM
Updated on Apr 20, 2015 at 5:32 PM

Analysts are weighing in on data storage solutions specialist SanDisk Corporation (NASDAQ:SNDK), biopharmaceutical firm MannKind Corporation (NASDAQ:MNKD), and mining magnate ArcelorMittal SA (ADR) (NYSE:MT). Here's a quick roundup of today's bearish brokerage notes on SNDK, MNKD, and MT.

  • True to form, SNDK is bracing for an 8% plunge out of the gate, after the firm posted lower-than-expected first -quarter earnings, and forecast a drop in full-year revenue for the first time in three years. In order to reduce costs, SanDisk Corporation said it will cut roughly 5% of its workforce. Wall Street was quick to weigh in on SNDK following last night's results, with the stock receiving a slew of bearish brokerage notes. Included in the bunch were downgrades from BTIG (to "sell") and Credit Suisse (to "neutral"), as well as price-target cuts from Baird (to $60) and Nomura (to $50). Jefferies, meanwhile, raised its price target to $82 from $77, representing expected upside of 15.3% to last night's close at $71.12. Today's projected price move is just more of the same for a stock that's shed north of 27% in 2015, and should the shares continue this path lower, another round of downbeat analyst attention could be on the horizon. Currently, 62% of those covering SNDK maintain a "buy" or better rating.

  • RBC reduced its price target on MNKD by $3 to $10 -- but kept its "outperform" rating -- although this new target still rests at an 89.3% premium to Wednesday's settlement at $5.28. On the charts, the security has been hovering around its year-to-date breakeven line in recent weeks, and option traders have been rolling the dice on a breakout. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MannKind Corporation's 10-day call/put volume ratio of 9.57 ranks in the 85th annual percentile. Simply stated, calls have been bought to open over puts with more rapidity just 15% of the time within the past year.

  • MT is pointed 1.4% lower in electronic trading -- and on track to test its footing in double-digit territory -- after Goldman Sachs reduced its price target on the shares to 7.30 euros from 8 euros, and reiterated its "sell" recommendation. On the charts, the equity has been a long-term laggard, shedding 37% over the past 52 weeks to trade at $10.19. Option players have shown a distinct preference for calls over puts, however. For starters, MT's 10-day ISE/CBOE/PHLX call/put volume ratio of 41.50 rests 4 percentage points from a 52-week peak. Additionally, ArcelorMittal SA's Schaeffer's put/call open interest ratio (SOIR) of 0.63 sits lower than 95% of all comparable readings taken in the past 12 months. In other words, short-term speculators are more call-heavy than usual toward MT.

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