Analyst Downgrades: Coty, Barracuda Networks, and Gap

Analysts downwardly revised their ratings on Coty Inc (NYSE:COTY), Barracuda Networks Inc (NYSE:CUDA), and Gap Inc (NYSE:GPS)

by Josh Selway

Published on Jul 10, 2015 at 10:03 AM
Updated on Jul 2, 2020 at 2:40 PM

Analysts are weighing in today on beauty specialist Coty Inc (NYSE:COTY), cloud security stock Barracuda Networks Inc (NYSE:CUDA), and clothing retail giant Gap Inc (NYSE:GPS). Here's a quick roundup of today's bearish brokerage notes on COTY, CUDA, and GPS.

  • A day after the company agreed to buy a majority of Procter & Gamble Co's (NYSE:PG) beauty products segment, COTY was hit with a downgrade at Wells Fargo. The brokerage firm lowered its opinion on the stock to "market perform" from "outperform," saying the deal with PG is a clear positive, but the financial potential has already been priced into COTY shares. Elsewhere, B. Riley last night upped its price target on the stock to $23, but maintained its "sell" assessment. The deal certainly didn't sit well with the Street initially, as the shares fell 4.7% yesterday to finish at $30.04. This morning, Coty Inc has lost another 4.5% to trade at $28.66, paring its year-to-date lead to 39%. Option traders, meanwhile, have been pulling for more upside. Nearly 6,000 COTY calls have been bought to open during the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to fewer than 400 puts

  • CUDA is getting crushed this morning, losing 20.3%, as the company's fiscal first-quarter earnings report prompted a round of bearish analyst attention. Specifically, J.P. Morgan Securities lowered its price target to $42 from $50 -- citing concern over billing issues -- while Piper Jaffray cut its expected price to $40 from $47. With the shares at $31.19, Barracuda Networks Inc has given back all of its 12-month gains, and it could be in trouble if more analysts lower their outlooks. Currently, eight of nine brokerage firms say the stock is a "buy" or better, while its average 12-month price target stands at $48.08 -- territory never before charted.

  • After the company yesterday reported a drop in June same-store sales, Cantor cut its price target on GPS to $39 from $42. The stock is now down 2% in early trading at $37.02, and is off 15.7% since touching a 2015 high of $43.90 on March 31. This all has to please short sellers. Almost 10% of Gap Inc's float is sold short, which would take almost seven sessions to repurchase, at the equity's normal daily volumes.

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