Analyst Downgrades: Bank of America Corp, Valeant Pharmaceuticals Intl Inc, and Workday Inc

Analysts downwardly revised their ratings and price targets on Bank of America Corp (BAC), Valeant Pharmaceuticals Intl Inc (VRX), and Workday Inc (WDAY)

Mar 1, 2016 at 9:29 AM
facebook twitter linkedin

Analysts are weighing in on financial giant Bank of America Corp (NYSE:BAC), drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and cloud concern Workday Inc (NYSE:WDAY). Here's a quick roundup of today's bearish brokerage notes on BAC, VRX, and WDAY.

  • Raymond James weighed in on a number of bank stocks, including BAC -- where the brokerage firm cut its price target to $16 from $17.50. Ahead of the bell, though, the shares are 1.3% higher, after closing at $12.52 yesterday. It's been a rough 2016 for Bank of America Corp, which has lost more than one-quarter of its value on a year-to-date basis amid sector-wide headwinds. Not surprisingly, the stock's options pits are tilted in a decidedly bearish direction. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BAC's 10-day put/call volume ratio of 0.31 ranks in the top quartile of its annual range, indicating traders have been buying to open bearish bets over bullish at a quicker-than-usual clip of late.
  • In what's becoming a pattern, VRX received yet another round of bearish brokerage notes this morning. This time, RBC downgraded its rating on the stock to "sector perform" from "outperform" and slashed its price target to $85 from $194. In addition, Jefferies cut its price target to $106 from $172. On the charts, Valeant Pharmaceuticals Intl Inc has gotten buried, and yesterday it lost 18.4% to $65.80 after the company confirmed it faces "several ongoing investigations" by regulators, and received a subpoena from the Securities and Exchange Commission (SEC). Nonetheless, the stock has crept 0.4% higher ahead of the open. On the options front, short-term traders have rarely been so call-skewed toward VRX in the past year, based on its Schaeffer's put/call open interest ratio (SOIR) of 0.92 -- which sits below 95% of all other readings from the prior 12 months.
  • WDAY is set to pop 7.2% at the open, after the company reported higher-than-expected revenue during the fourth quarter. However, the software maker's sales guidance disappointed, prompting a raft of price-target cuts on Wall Street. No fewer than 10 analysts lowered their price targets on Workday Inc, with only Piper Jaffray breaking ranks -- raising its price target to $61 from $48. On the charts, the shares have been coming back since hitting a three-year low of $47.32 on Feb. 9, up 27.7% at $60.45. Option traders aren't buying the bounce, based on WDAY's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.39, which ranks in the bearishly skewed 70th annual percentile.
Sign up now for Schaeffer's Opening View newsletter to get a head start on all the major pre-market news!

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report


Special Offers from Schaeffer's Trading Partners