Analyst Downgrades: Ambarella Inc, Baidu Inc, and Valeant Pharmaceuticals Intl Inc

Analysts downwardly revised their ratings and price targets on Ambarella Inc (AMBA), Baidu Inc (ADR) (BIDU), and Valeant Pharmaceuticals Intl Inc (VRX)

by Alex Eppstein

Published on Feb 29, 2016 at 10:05 AM

Analysts are weighing in on semiconductor firm Ambarella Inc (NASDAQ:AMBA), China-based search engine Baidu Inc (ADR) (NASDAQ:BIDU), and drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on AMBA, BIDU, and VRX.

  • Ahead of Thursday afternoon's earnings report, AMBA saw its price target cut to $50 from $60 at Deutsche Bank. However, out of the gate, the stock is up 2.1% at $44.99. Taking a step back, it hasn't been a great year for Ambarella Inc, which has lost 19% year-to-date and underperformed the broader S&P 500 Index (SPX) by over 20 percentage points during the past three months. Not surprisingly, short sellers have been piling on. Nearly 39% of AMBA's float is sold short, which represents almost nine sessions' worth of trading activity, at the stock's average daily volume.
  • BIDU is off 0.5% this morning at $173, after Nomura cut its price target to $176 from $180 -- overshadowing a price-target hike to $240 from $225 at Oppenheimer. Elsewhere, Moody's said the company's upbeat earnings results from last week support its A3 credit rating and a "positive" outlook. Despite slipping slightly on the charts, Baidu Inc remains on track to close above its 120-day moving average for the second straight session -- something the stock hasn't done since early January. Should this trendline materialize as support, a bounce by the shares could send bearish option traders running for cover. After all, BIDU's 50-day put/call volume ratio of 0.95 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 94th percentile of its annual range.
  • VRX has plummeted 8.7% at $73.79, after CEO Michael Pearson announced his return following a prolonged hospital stay and the company delayed the release of its fourth-quarter earnings results. The news prompted a series of bearish brokerage notes, with TD Securities downgrading its opinion to "hold" from "buy" and cutting its price target to $110 from $155, and Canaccord Genuity slashing its price target to $125 from $170. Sharp losses are nothing new for Valeant Pharmaceuticals Intl Inc, which has lost 72% since its record high of $263.81 in early August. However, option traders foresee a bounce. During the past 10 days at the ISE, CBOE, and PHLX, VRX has amassed a call/put volume ratio of 1.51, outstripping 71% of comparable readings from the last year.
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