Analyst Downgrades: American Eagle, Lululemon, Valeant

Analysts downwardly revised their ratings on American Eagle Outfitters (NYSE:AEO), Lululemon Athletica inc. (NASDAQ:LULU), and Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

Nov 30, 2015 at 9:31 AM
facebook X logo linkedin


Analysts are weighing in on apparel retailers American Eagle Outfitters (NYSE:AEO) and Lululemon Athletica inc. (NASDAQ:LULU), as well as drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on AEO, LULU, and VRX.

  • AEO is poised to dip 1% at the open, following a downgrade to "perform" from "outperform" and a price-target cut to $17 from $19 at Oppenheimer, with the brokerage firm citing valuation concerns. The stock has been faring well in 2015, advancing over 18% to trade at $16.40 -- though recent breakout attempts have fizzled at its 100-day moving average. Of course, the moment of truth arrives Wednesday evening, when American Eagle Outfitters will report third-quarter earnings. Short sellers are counting on a post-event swoon, as one-quarter of the stock's float is dedicated to short interest -- an amount that would take close to eight sessions to repurchase, at AEO's average daily volume.
  • LULU is gearing up for a 4.8% drop this morning, after FBR downgraded its opinion to "underperform" from "market perform," and lowered its price target to $42 from $55. Along similar lines, Canaccord Genuity trimmed its price target to $52 from $54. These bearish notes aren't exactly timely; though the stock is down about 6% in 2015, Lululemon Athletica inc. has bounced strongly from its mid-November annual low of $43.14, settling at $52.50 on Friday. Not everyone's betting against the shares. Based on data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have been very bullish -- buying to open 3.53 calls for every put during the past 10 weeks. The corresponding call/put volume ratio ranks just 6 percentage points from a 52-week high.
  • While Bill Ackman may be confident in VRX, others on the Street are not, as the stock continues to reel in the wake of Citron Research's short-seller report. Today, CIBC piled on, cutting its price target by more than half to $90 from $200. There are plenty of brokerage firms that could follow suit, as 10 of 14 rate Valeant Pharmaceuticals Intl Inc a "buy" or better, with not a single "sell" opinion on the books. Plus, the stock's consensus 12-month price target of $168.91 represents a 94% premium to last week's settlement at $87.09. As noted, VRX has been swooning in recent months, giving up two-thirds of its value since notching a record high of $263.81 in early August.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI