Analyst Update: Avalanche, Aspen Tech, GameStop

Analysts adjusted their ratings on Avalanche Biotechnologies Inc (AAVL), Aspen Technology, Inc. (AZPN), and GameStop Corp. (GME)

Aug 14, 2015 at 12:37 PM
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Analysts are weighing in today on biotechnology company Avalanche Biotechnologies Inc (NASDAQ:AAVL), software firm Aspen Technology, Inc. (NASDAQ:AZPN), and video game retailer GameStop Corp. (NYSE:GME). Here's a quick roundup of today's brokerage notes on AAVL, AZPN, and GME.

  • AAVL reported a slimmer-than-expected second-quarter loss, but the big news was Avalanche Biotechnologies Inc deciding not to initiate a second mid-stage study of its eye drug. This news triggered a flurry of analyst activity, with Cowen and Company more than halving its price target to $25 from $55, Jefferies slashing its price target to $20 from $51, and Piper Jaffray lowering its target to $25 from $30. Today's news and subsequent analyst notes has pushed AAVL more than 26% lower to its current perch at $10.15, and the security just touched an all-time low of $9.36. Short sellers have loaded up on bearish bets against AAVL, as 19.4% of the equity's float is sold short. However, the shares are now on the short-sale restricted (SSR) list, thanks to today's steep plunge.
  • AZPN beat fiscal fourth-quarter earnings and sales estimates. So, why is the stock the biggest loser on the Russell 2000 Index (RUT), down 12% at $36.07? Aspen Technology, Inc. offered relatively weak guidance. In response, Benchmark cut its price target on AZPN to $45, but said the firm "is one of the better-run companies that we follow, and as such, we would use any weakness as a buying opportunity." With the stock's gap lower and poor performance today, AZPN is now resting on potential support from its 40-month moving average. This support will come under serious stress today though, as AZPN is now challenging lows not seen since the beginning of the year. What's more, the equity could see an unwinding of optimism, as AZPN's Schaeffer's put/call open interest ratio (SOIR) of 0.26 is lower than 60% of the readings taken this year. In other words, short-term option traders are more call-heavy than usual right now.
  • GME is nearly 3% higher at $47.33 this afternoon, and notched an annual high of $47.82, after receiving some positive coverage from SunTrust Robinson. The brokerage elevated its price target on the video game retailer to $58 from $50 -- in territory not charted since early 2008. While GameStop Corp. struggled toward the end of 2014, it has advanced 40% in 2015. However, short sellers remain extremely wary. Nearly 42% of GME's float is sold short, and it would take nearly 31 days for the bears to cover their shorted shares, at the stock's average pace of trading. If today's news is followed by any more good news, we could see a sustained short-covering rally for GME.

For other stocks in analysts' crosshairs, read Analyst Upgrades: Cyberark Software Ltd, Kinder Morgan Inc, and Sirius XM Holdings Inc. and Analyst Downgrades: King Digital Entertainment PLC, Chesapeake Energy Corporation, and Applied Materials, Inc.


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