Buzz Stocks: Expedia Inc, Incyte Corporation, and Mylan NV

Today's stocks to watch include Expedia Inc (EXPE), Incyte Corporation (INCY), and Mylan NV (MYL)

Feb 11, 2016 at 9:29 AM
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U.S. stocks are bracing for a bruising amid a global sell-off, and with Fed Chair Janet Yellen headed to Capitol Hill once again. Meanwhile, travel site Expedia Inc (NASDAQ:EXPE), as well as drugmakers Incyte Corporation (NASDAQ:INCY) and Mylan NV (NASDAQ:MYL) are among the equities in focus today.

  • EXPE reported lower-than-expected fourth-quarter profits, saying the Paris terrorist attacks in November curbed travel to European cities, but also provided upbeat guidance for 2016. In response, Benchmark raised its price target on the stock to $132, while at least seven others cut their targets. It appears traders are reacting more favorably, with Expedia Inc up over 11% ahead of the bell. Longer term, the shares have been trending sharply lower since topping out at a record $140.51 in early November, closing yesterday at $94.35. Elsewhere, option traders have been taking a glass-half-full approach. EXPE's 10-day call/put volume ratio of 1.89 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) outstrips 81% of comparable readings from the prior year.

  • INCY is bracing for a nearly 16% fall out of the gate -- and a new annual low -- after the drugmaker announced it will stop several trials of its cancer drug ruxolitinib. This negative news is overshadowing the company's better-than-expected quarterly results. It will be interesting to see whether today's expected bear gap forces the analyst community to rethink its collective optimism toward Incyte Corporation. In fact, 11 out of 12 brokerages rate the shares a "strong buy," while the stock's consensus 12-month price target of $113.69 stands at a 57% premium to Wednesday's close at $72.31.

  • MYL announced it has agreed to buy Swedish pharmaceutical firm Meda AB for $7.2 billion, after attempts to purchase Perrigo Company plc (NYSE:PRGO) were rebuffed late last year. However, Wall Street is panning the move -- as well as Mylan NV's earnings miss -- with Cowen, Goldman Sachs, and BTIG cutting their price targets on the shares. Currently, the stock is down 12.4% in electronic trading, after closing yesterday at $50.54. Option traders are poised to profit from extended losses for MYL, based on its 10-day ISE/CBOE/PHLX put/call volume ratio of 1.52 -- in the 78th percentile of its annual range. On top of that, short-term speculators have never been so put-skewed in the past year, as the stock's Schaeffer's put/call open interest ratio (SOIR) stands at an annual high of 1.36.
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