Analyst Downgrades: Chipotle Mexican Grill, Inc., Chimerix Inc, and Palo Alto Networks Inc

Analysts downwardly revised their ratings and price targets on Chipotle Mexican Grill, Inc. (CMG), Chimerix Inc (CMRX), and Palo Alto Networks Inc (PANW)

Feb 23, 2016 at 9:28 AM
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Analysts are weighing in on restaurant stock Chipotle Mexican Grill, Inc. (NYSE:CMG), biotech issue Chimerix Inc (NASDAQ:CMRX), and cybersecurity firm Palo Alto Networks Inc (NYSE:PANW). Here's a quick roundup of today's bearish brokerage notes on CMG, CMRX, and PANW.

  • Deutsche Bank downgraded CMG to "sell" this morning, sending the shares 2.3% lower ahead of the bell. Chipotle Mexican Grill, Inc. closed at $525.90 on Monday, up from the two-year low of $399.14 tapped in mid-January. The stock fell hard in light of multiple food-borne illness incidents in late 2015, but CMG is now ahead 9.6% year-to-date. And while analysts are still wary -- 17 out of 26 rate the security a "hold" -- option traders have been looking for more upside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 1.16 is in the 92nd percentile of its annual range.
  • It looks like more bad news for CMRX, after yesterday's disappointing drug data sent the stock plummeting 40% to $4.55. Today, Chimerix Inc has been hit with downgrades to "underweight" from "equal weight" at Morgan Stanley, and to "equal weight" from "overweight" at Barclays, with price-target cuts rolling in from both firms -- as well as analysts at William Blair. However, the stock is 1.7% higher in pre-market trading. Only two of 10 analysts following the shares maintain a rating better than a "hold," and it's little wonder -- CMRX has shed more than 92% of its value from its early August high, due in large part to a massive December bear gap.
  • PANW is up 0.3% ahead of the open, despite Cowen and Company and UBS both lowering their price targets on the stock -- to $190 and $185, respectively. Palo Alto Networks is on the rebound from an annual low of $111.09, set earlier this month, and option traders appear hopeful that the security will maintain its positive momentum ahead of the company's fiscal second-quarter earnings report, due after the close on Thursday. Specifically, more than two PANW calls have been bought to open for each put during the last 10 trading days on the ISE, CBOE, and PHLX -- a ratio that ranks higher than 94% of all readings taken in the past year. And despite today's price-target cuts, analysts seem to be in agreement -- 25 out of 28 now rate the stock a "buy" or better.
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