Analyst Downgrades: Chipotle Mexican Grill, Inc., LinkedIn Corp, and Valeant Pharmaceuticals Intl Inc

Analysts downwardly revised their ratings and price targets on Chipotle Mexican Grill, Inc. (NYSE:CMG), LinkedIn Corp (NYSE:LNKD), and Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

by Josh Selway

Published on Mar 16, 2016 at 9:26 AM

Analysts are weighing in on restaurant stock Chipotle Mexican Grill, Inc. (NYSE:CMG), professional networking site LinkedIn Corp (NYSE:LNKD), and biotech stock Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on CMG, LNKD, and VRX.

  • CMG has dropped 5.1% in pre-market trading, after the company yesterday announced a 26.1% drop in same-store sales for February, and said it'll post its first quarterly loss since going public, due to the string of health-related incidents. Additionally, the restaurant chain said it has hired James Marsden as executive director of food safety.

    Maxim, meanwhile, cut its outlook on CMG to "sell" from "hold," while slashing its price target by $100 to $350 -- territory the stock hasn't explored since April 2013 -- citing ongoing food-safety concerns. Cowen and Company also weighed in by dropping its price target to $430 from $450. Today's projected price move could be good news for all the short sellers who have recently poured into the stock. Specifically, Chipotle Mexican Grill, Inc.'s short-interest levels increased by over 11% during the most recent reporting period, and now over 10% of its float is sold short. CMG closed Tuesday at $503, down over 25% year-over-year. 
  • LNKD is down 3.9% ahead of the open, following a downgrade to "equal weight" from "overweight" and a price-target cut to $125 from $190 at Morgan Stanley. The brokerage firm stated, "With its current product offering, LNKD isn't likely to be as big of a platform as we previously thought." It's been a dreadful year for LinkedIn Corp, which lost more than two-fifths of its value overnight following its weak profit forecast last month, and settled last night at $115.58 -- down 49% on the year. More bearish notes could be in store, too, since 16 analysts still rate the stock at least a "buy."
  • Bearish analysts are piling on to VRX, after the shares lost more than half their value yesterday, following the firm's dismal full-year guidance, and potential default concerns. Nomura was one of several brokerages to weigh in, reducing its opinion to "neutral" from "buy," and cutting its price target to $60 from $175. The brokerage firm said it has "lost confidence in management's ability to understand its own business and to provide reliable guidance."

    The lowest mark, however, came from CIBC, which set its price target at $24 --  five-year-low territory -- while also downgrading the stock to "sector underperformer" from "sector performer." After closing at $33.51 on Tuesday, Valeant Pharmaceuticals Intl Inc is pointed higher in electronic trading -- not surprising considering its oversold 14-day Relative Strength Index (RSI) of 23 -- but yesterday's put players should still be sitting pretty. 
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