Analyst Downgrades: Urban Outfitters, Clovis Oncology, Valeant

Analysts downwardly revised their ratings on apparel retailer Urban Outfitters, Inc. (NASDAQ:URBN), as well as drugmakers Clovis Oncology Inc (NASDAQ:CLVS) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

by Alex Eppstein

Published on Nov 17, 2015 at 9:26 AM
Updated on Jul 2, 2020 at 3:16 PM

Analysts are weighing in on apparel retailer Urban Outfitters, Inc. (NASDAQ:URBN), as well as drugmakers Clovis Oncology Inc (NASDAQ:CLVS) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on URBN, CLVS, and VRX.

  • URBN is fresh off reporting earnings, and traders are panning the company's disappointing same-store sales numbers, pressuring the shares nearly 13% lower ahead of the bell. This comes just a day after the stock fell over 7% -- and to a four-year low of $22.04 -- amid reports of an outside-of-the-box acquisition, to settle at $22.67. Adding to today's bearish bias, Urban Outfitters, Inc. is fielding a round of bearish brokerage notes, including a downgrade to "sector perform" from "outperform" at RBC. The brokerage firm also was one of at least 20 to slash its price target on URBN, reducing its expectations by $9 to $23. Losses are nothing new for URBN, nor is negative sentiment. Put buying at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has been occurring at a breakneck pace, based on the stock's 10-day put/call volume ratio of 2.92 -- in the 93rd percentile of its annual range.
  • It looks like CLVS will follow up yesterday's disastrous session with yet another clunker, down 7% in pre-market trading. Goldman Sachs is adding insult to injury, lowering its rating to "neutral" from "buy," removing the stock from its "Americas Conviction" list, and cutting its price target by $100 to $23. Likewise, J.P. Morgan Securities last night more than halved its price target, to $42 from $110. As alluded to, Clovis Oncology Inc got roughed up yesterday, shedding 70% of its value to close at $30.24, and skimming a two-year low of $26.05. Short sellers wouldn't mind if the shares racked up additional losses. Over 13% of CLVS' float is sold short, representing almost seven days' worth of trading activity, at the stock's average daily volume.
  • VRX has also struggled mightily in recent weeks, thanks to last month's bombshell short seller report. Since the fraud allegations broke on Oct. 21, the equity has surrendered about 50% of its value to land at $73.32 -- much to the chagrin of activist investor Bill Ackman -- and Valeant is facing scrutiny in Washington, D.C. Amid all this hullabaloo, Morgan Stanley slashed its price target to $98 from $200, and reduced its 2016 earnings estimates, saying there's "too much smoke for our comfort." There's plenty more room on Valeant Pharmaceuticals Intl Inc's bearish bandwagon, too. Over two-thirds of covering analysts rate the stock a "buy" or better, with not a single "sell" recommendation in sight. Plus, VRX's consensus 12-month price target of $220.82 stands at a 200% premium to Monday's close. This leaves the door wide open for future downgrades and/or price-target cuts.

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