Analyst Downgrades: Chipotle Mexican Grill, Inc., Apple Inc., and NetApp Inc.

Analysts downwardly revised their ratings and price targets on Chipotle Mexican Grill, Inc. (CMG), Apple Inc. (AAPL), and NetApp Inc. (NTAP)

Dec 22, 2015 at 10:09 AM
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Analysts are weighing in on restaurant interest Chipotle Mexican Grill, Inc. (NYSE:CMG), tech giant Apple Inc. (NASDAQ:AAPL), and data storage specialist NetApp Inc. (NASDAQ:NTAP)Here's a quick roundup of today's bearish brokerage notes on CMG, AAPL, and NTAP.

  • CMG is trading 3.6% lower at $503.30 -- and earlier touched an annual low of $498.20 -- after J.P. Morgan Securities cut its rating on the stock to "neutral" from "overweight," trimmed its price target to $555 from $630, and lowered its full-year earnings estimates for 2016 and 2017. "At this point, even rational and informed consumers could potentially be given reason to pause when choosing Chipotle over the plethora of fast casual competition," the analysts wrote, referring to CMG's E. coli woes. Chipotle Mexican Grill, Inc. has shed 33% since its October peak -- before the first news of an E. coli outbreak was released. More recently, an estimated 140 students at Boston College became ill with norovirus after eating at the restaurant. And on Monday, five new E. coli cases in three more states were linked to CMG. More than half of analysts now rate the stock a "hold" or worse, and short interest has ramped up more than 35% during the most recent reporting period. Nearly 6% of the stock's available float is currently sold short, but at CMG's average pace of trading, it would take just over a day to buy back these shares.
  • AAPL is 0.7% lower at $106.58, after receiving a price-target cut to $130 from $135 at Cowen and Company. Apple Inc. has been the object of much scrutiny recently, as analysts cast a wary eye at iPhone and Apple Watch sales. The shares have fallen roughly 10% so far in December, and now sit in negative year-to-date territory. Short interest on AAPL has surged more than 50% during the last reporting period, and now accounts for over three days of trading, at typical volumes. Option bulls have been disappearing, too. The stock has a Schaeffer's put/call open interest ratio (SOIR) of 0.86 -- higher than 92% of readings from the past year.
  • NTAP is down 7% at $25.66 -- and just touched a five-year low of $25.21 -- after the firm announced it would purchase flash-storage systems maker SolidFire in an $870 million cash deal. In light of the news, RBC cut its rating on the stock to "sector perform" from "outperform," and its price target to $28 from $38, while Macquarie, Susquehanna, and Piper Jaffray also slashed their price targets to $30, $31, and $27, respectively. NetApp Inc. has been trending lower for the past year, and now sits on a year-to-date deficit of 38%. Of the 27 analysts covering the stock, 22 give it a "hold" or "sell" rating. But option traders have been more optimistic lately. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NTAP has a 10-day call/put volume ratio of 4.45 -- higher than 78% of all readings in the past 12 months. A mass exodus of option bulls could exacerbate selling pressure on the security.
 

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