Analyst Downgrades: Valeant, Kinder Morgan, Lululemon

Analysts downwardly revised their ratings on Valeant Pharmaceuticals Intl Inc (VRX), Kinder Morgan Inc (KMI), and Lululemon Athletica inc. (LULU)

Oct 22, 2015 at 9:29 AM
facebook twitter linkedin

Analysts are weighing in on drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), energy issue Kinder Morgan Inc (NYSE:KMI), and yoga apparel seller Lululemon Athletica inc. (NASDAQ:LULU). Here's a quick roundup of today's bearish brokerage notes on VRX, KMI, and LULU.

  • Just a day after plunging 19.2% on some bold accusations, VRX is pointed another 4.2% lower ahead of the bell. Overnight, BMO downgraded the stock to "market perform" from "outperform" and slashed its price target to $141 from $265, while BTIG reduced its target to $210 from $250, sparking the aforementioned price action. There's plenty of room on Valeant Pharmaceuticals Intl Inc's bearish bandwagon, too. Two-thirds of covering analysts rate the equity a "buy" or better, with not a single "sell" in sight. Plus, the security's consensus 12-month price target of $333.95 more than doubles last night's close at $118.61.
  • KMI is getting roughed up by the brokerage crowd, after the company reported weaker-than-forecast results last night. Specifically, Credit Suisse lowered its rating to "neutral" from "outperform" and its price target to $39 from $52, Stifel downgraded its opinion to "hold" from "buy," and three other analysts slashed their price targets. Ahead of the bell, Kinder Morgan Inc is down 5% from Wednesday's close at $31.42, and the shares have already lost more than one-quarter of their value in 2015. Not surprisingly, options traders have grown cold toward KMI on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Across those exchanges, the stock has amassed a 10-day put/call volume ratio of 2.55 -- just 7 percentage points from a 12-month peak. 
  • LULU saw its price target trimmed to $55 from $59 at UBS this morning, after the retailer last night announced a set of organizational changes. The bearish note has the stock 2.4% lower in electronic trading. Fortunately for shareholders, the stock has found a foothold at the round $50 level in recent weeks. Should Lululemon Athletica inc. bounce from this area once again, short sellers could start to throw in the towel. Over 26% of the equity's float is sold short, representing over eight days' worth of pent-up buying demand, at typical volumes. Last night, LULU settled at $52.
Get the skinny on all the biggest stories of the morning… Sign up now to get Schaeffer's Midday Market Check delivered straight to your inbox!

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners