Analyst Downgrades: Men's Wearhouse, Tripadvisor, Chipotle

Analysts downwardly revised their ratings on Men's Wearhouse Inc (MW), Tripadvisor Inc (TRIP), and Chipotle Mexican Grill, Inc. (CMG)

Nov 6, 2015 at 9:58 AM
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Analysts are weighing in on retailer Men's Wearhouse Inc (NYSE:MW), travel issue Tripadvisor Inc (NASDAQ:TRIP), and burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of today's bearish brokerage notes on MW, TRIP, and CMG.

  • MW is down roughly 38% at $24.90 -- and earlier hit a nearly five-year low of $24 -- after the company warned its third-quarter profit will come in well below the Street's consensus estimate. Adding insult to injury, Jefferies, Mizuho, and Goldman Sachs lowered their ratings on the stock to the equivalent of a "hold," and reduced their price targets, with the latter also removing Men's Wearhouse Inc from its "Americas Buy" list. Cowen likewise slashed its price target to $30 from $53. All of this is good news for short sellers. Over 13% of MW's float is sold short, representing eight days' worth of trading activity, given the stock's typical volumes.

  • TRIP is down nearly 10% to trade at $74.94 -- almost wiping out its year-to-date gains -- following the company's downbeat earnings report and sales growth guidance, and a round of bearish brokerage attention. Specifically, no fewer than 10 analysts cut their price targets on the equity, with the deepest cut courtesy of Evercore ISI (to $69 from $85). In the weeks leading up to the quarterly results, traders were betting bearishly at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the past 10 sessions, Tripadvisor Inc has amassed a put/call volume ratio of 2.14 -- higher than all but 16% of the readings taken in the last year, hinting at a pronounced preference for long puts over calls.

  • Currently wrestling with an E. coli outbreak, CMG was downgraded to "neutral" at Baird. As such, the stock has shed 2.8% to hover near $599.98, bringing its year-to-date loss to 12%, exacerbated by a recent earnings miss. Future downgrades remain a possibility, considering 15 of 26 analysts rate Chipotle Mexican Grill, Inc. a "buy" or better, with not a single "sell" rating on the books. Along similar lines, brokerage firms may now be inclined to reduce their price targets on the shares, as CMG's average 12-month price target of $754.83 stands at a 25.8% premium to present trading levels.
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