Analyst Update: EP Energy, Infinity Pharma, Dean Foods

Analysts adjusted their ratings and price targets on EP Energy Corp (EPE), Infinity Pharmaceuticals Inc. (INFI), and Dean Foods Co (DF)

Mar 22, 2016 at 3:25 PM
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Analysts are weighing in on oil-and-gas stock EP Energy Corp (NYSE:EPE), biotech issue Infinity Pharmaceuticals Inc. (NASDAQ:INFI), and dairy distributor Dean Foods Co (NYSE:DF). Here's a quick roundup of today's brokerage notes on EPE, INFI, and DF.

  • Capital One cut its rating on EPE to "underweight" from "equal weight," while BofA-Merrill Lynch downgraded the stock to "underperform" from "neutral" and set a $3 price target. Northland, RBC Capital, and KLR, meanwhile, raised their price-targets on EP Energy Co to $2.50, $6, and $7, respectively. The stock spent most of the day in the red, but has swung to a 6.8% gain to sit at $5.80 in afternoon trading. EPE has more than tripled in the past month, but ran into a speed bump in the form of its 200-day moving average. Short sellers could be sweating as a result. EPE is on the short-sale restricted (SSR) list today following an early drop, but nearly 39% of its total float is already tied up in these bearish bets, accounting for more than a week of trading, at the stock's average daily volume.
  • Wedbush downgraded INFI to "underperform" from "neutral" while slashing its price target to $3 from $8, sending the shares plummeting 13.2% to $5.66 -- not far off their five-year low of $5.17, seen less than one month ago. The stock has shed about 28% year-to-date, but could fall even further should more analysts follow suit. Currently, six out of seven firms following Infinity Pharmaceuticals Inc. rate it a "buy" or better. The shares have been trending steadily lower since late 2014, under pressure from their descending 20- and 32-week moving averages. Unsurprisingly, short interest on INFI is elevated, representing about 14% of the equity's total float, or 9.5 days' worth of trading, at INFI's typical pace -- but today's drop has INFI, too, on the SSR list.
  • DF is off 11.6% at $17.01, suffering its worst day in seven months, after analysts from Morgan Stanley noted that the construction of Wal-Mart Stores, Inc.'s (NYSE:WMT) new milk plant in Indiana is an "unfavorable development" for Dean Foods Co -- currently the largest dairy processor in the country. While today's bear gap has the stock sitting just in the red for 2016, it could be enough to have option buyers shaking. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than six DF calls for each put over the last 10 sessions -- with a resulting 10-day call/put volume ratio higher than nearly three-fourths of comparable readings in the past year.
For other stocks in analysts' crosshairs, read Analyst Upgrades: AT&T Inc., Zillow Group, Inc. - Class C, and Wynn Resorts, Limited and Analyst Downgrades: Amazon.com, Inc., Yahoo! Inc., and Chevron Corporation.

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