Buzz Stocks: Pfizer Inc., Chipotle Mexican Grill, Inc., and Peabody Energy Corporation

Today's stocks to watch include Pfizer Inc. (PFE), Chipotle Mexican Grill, Inc. (CMG), and Peabody Energy Corporation (BTU)

Nov 23, 2015 at 9:58 AM
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U.S stocks are modestly higher this morning, as oil stays in focus to start the week, and light trading volumes are expected, thanks to the upcoming holiday. Among the equities in focus are pharmaceutical interest Pfizer Inc. (NYSE:PFE), restaurant giant Chipotle Mexican Grill, Inc. (NYSE:CMG), and energy concern Peabody Energy Corporation (NYSE:BTU).

  • PFE is pointed 2.8% lower this morning, last seen trading at $31.29, after it announced it will purchase Allergan PLC (NYSE:AGN) in a $160 billion stock deal. This buyout will make Pfizer Inc. the largest drugmaker in the world. The deal is valued at $363.63 per share of Allergan, a nice premium to the company's Friday close of $312.84. From a sentiment perspective, options traders are still bearish on PFE's short-term prospects. Pfizer Inc. holds a Schaeffer's put/call open interest ratio of 0.88 -- higher than 95% of comparable readers for the last year, indicating an extreme preference for puts over calls.
  • The nightmare continues for CMG, as the restaurant chain has reported that the E. coli outbreak connected to its stores has spread to four more states. However, Chipotle Mexican Grill, Inc. says it will not shut down any of its stores at this time, and the shares are up 4% at $557.87 so far today -- even though Sterne Agee CRT downgraded the stock to "neutral" from "buy," and three other brokerages handed out price-target cuts. The burrito giant has been struggling for weeks, pressured by news of the initial outbreak in Oregon and Washington, along with a third-quarter earnings miss. Still, more than half of analysts following the company rate it a "buy" or better -- which means, in light of Chipotle's 18.5% year-to-date loss, that more negative notes could be forthcoming.
  • BTU is shaking things up, after a bearish brokerage note sent the already dismal shares farther south to hit an all-time low at $11.00 on Friday. Today, Peabody Energy Corporation is up 11.1%, last seen trading at $12.54, as the company has agreed to the sale of its coal assets in Colorado and New Mexico to Bowie Resource Partners for $358 million in cash. The effect of this news on the shares could get interesting, as more than 35% of Peabody's total available float is currently sold short. With a short-interest ratio of five days to cover, BTU is moving rapidly higher this morning as some of the weaker bearish hands hit the bricks.


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