Buzz Stocks: Celgene, Guess?, Mead Johnson Nutrition

Today's stocks to watch in the news include Celgene Corporation (CELG), Guess?, Inc. (GES), and Mead Johnson Nutrition CO (MJN)

Jul 15, 2015 at 9:28 AM
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U.S. stocks are sitting higher in pre-market action, as traders await a key Greek parliament vote and testimony from Fed Chair Janet Yellen. In company news, today's stocks to watch include biotech Celgene Corporation (NASDAQ:CELG), clothier Guess?, Inc. (NYSE:GES), and pediatric nutrition company Mead Johnson Nutrition CO (NYSE:MJN).

  • CELG is poised to jump 8.9% -- and explore record highs -- out of the gate, after the firm said it'll buy Receptos Inc (NASDAQ:RCPT) for $7.32 billion in cash, or $232 per share, a 12% premium to RCPT's close of $207.18 on Tuesday. Analysts are cheering the M&A news, with Celgene Corporation scoring no fewer than eight price-target hikes. Among them, Baird lifted its target to $162 from $139, and Deutsche Bank upped its target to $175 from $160; both brokerage firms underscored "buy" or equivalent ratings. CELG already sports 12 "buy" or better endorsements, compared to three lukewarm "holds." At Tuesday's close, the stock sat at $122.85, boasting a year-to-date gain of 9.8%.

  • GES is headed for a 6.8% surge, after the company said Victor Herrero -- a former Inditex Group exec -- will replace Paul Marciano as CEO next month. Subsequently, GES earned an upgrade to "hold" from "sell" at Evercore ISI, and a price-target hike to $24 at Wunderlich. The past year has been a struggle for Guess?, Inc., with the shares dropping 22.1% to sit at $21.16. However, since bottoming at $16.61 in mid-March, the stock has muscled higher, and is on pace to end the month atop its 10-month moving average -- and in positive year-to-date territory -- for the first time since late 2013. Should GES stage a notable rebound, short sellers could get spooked. Short interest accounts for almost 21% of the stock's total available float, representing nearly 13 sessions' worth of pent-up buying demand, at the equity's average pace of trading.

  • Finally, MJN is bracing for a 4.9% drop, after the company slashed its 2015 earnings and revenue forecast, citing a cooling Chinese economy. Mead Johnson Nutrition CO got almost one-third of its sales from China in 2014. The stock touched an annual low of $87.88 yesterday, before settling at $88.13, and today's expected plunge will put the shares deeper in the red. Amid the security's technical woes, short sellers have been piling on. Short interest skyrocketed by 37.5% during the past two reporting periods, and now accounts for almost 3.7 million MJN shares.
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