Analyst Downgrades: Valeant, Sabra, Yamana Gold

Analysts downwardly revised their ratings on Valeant Pharmaceuticals Intl Inc (VRX), Sabra Health Care REIT Inc (SBRA), and Yamana Gold Inc. (USA) (AUY)

Nov 2, 2015 at 9:51 AM
facebook twitter linkedin

Analysts are weighing in on drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), real-estate investment trust Sabra Health Care REIT Inc (NASDAQ:SBRA), and precious metal purveyor Yamana Gold Inc. (USA) (NYSE:AUY). Here's a quick roundup of today's bearish brokerage notes on VRX, SBRA, and AUY

  • VRX is up 2.4% out of the gate at $96.02, despite a round of bearish brokerage attention. Specifically, Goldman Sachs slashed its rating to "neutral" from "buy," while Jefferies and Canaccord Genuity reduced their respective price targets to $172 and $170. These developments come ahead of Citron Research's looming update on Valeant Pharmaceuticals Intl Inc, and after days of losses caused by the short seller's initial report. In fact, since the original allegations of "channel stuffing" broke, the security has lost roughly one-third of its value. This morning, though, it should be noted that Citron's Andrew Left said investors shouldn't "expect anything earth-shattering" (subscription required) in the soon-to-be-released update, potentially serving as the equity's upward catalyst. On the sentiment front, additional downgrades and price-target reductions remain a possibility. Nearly 70% of analysts rate VRX a "buy" or better -- with not a single "sell" in sight -- while its consensus 12-month price target sits at $291.47, or roughly triple current levels.

  • One week ahead of the company's third-quarter earnings report, SBRA plummeted to a two-year low of $20.91, and was last seen down 7.2%  at $21.05 in early trading on a bearish note from RBC. Specifically, the firm cut its rating to "underperform" from "sector perform," and its price target to $22 from $26, citing concerns about Sabra Health Care REIT Inc's Forest Park investment. Additional downward revisions could be around the corner, with more than half of covering analysts handing out "buy" or better endorsements, and not a single "sell" rating on the books. Plus, SBRA's consensus 12-month price target of $28.54 stands at a 35.6% premium to its current perch.

  • AUY is down 3.2% at $2.12 -- bringing its year-to-date loss beyond 47% -- thanks to a price-target cut to $2.40 from $2.50 at HSBC. This is probably encouraging to option traders, who have been upping the bearish ante in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Yamana Gold Inc. has racked up a 10-day put/call volume ratio of 0.32 -- higher than 83% of comparable readings from the past year. In other words, traders have been buying to open puts over calls at a faster-than-usual clip of late.
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!

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!