Analyst Downgrades: Under Armour Inc, Glu Mobile Inc., and Illumina, Inc.

Analysts downwardly revised their ratings and price targets on Under Armour Inc (NYSE:UA), Glu Mobile Inc. (NASDAQ:GLUU), and Illumina, Inc. (NASDAQ:ILMN)

by Josh Selway

Published on May 4, 2016 at 10:04 AM

Analysts are weighing in on athletic apparel retailer Under Armour Inc (NYSE:UA), mobile game producer Glu Mobile Inc. (NASDAQ:GLUU), and genetic analysis stock Illumina, Inc. (NASDAQ:ILMN). Here's a quick roundup of today's bearish brokerage notes on UA, GLUU, and ILMN.

  • Brean Capital cut its rating on UA to "hold" from "buy," after the company announced the departure of several top executives, including Chief Merchandising Officer Henry Stafford. Brean expressed concerns about the company's ability to execute following Stafford's exit, given his six-year tenure at the firm. As such, the shares are down 6.3% at $40.02. However, Under Armour Inc has found a familiar foothold atop the round-number $40 level -- also home to its 12-month breakeven level -- which has supported the stock in recent months. Given this technical support, the potential remains for a short-squeeze to send UA higher, with 18.5% of its float sold short. And it's not all bad news for the company this morning, as it agreed to a 10-year extension with MLB star Bryce Harper. 
  • GLUU has shed 19.1% this morning to trade at $2.16 -- landing it on the short-sale restricted list -- after the company's first-quarter sales disappointed. Glu Mobile Inc. also announced plans to reduce its workforce and cut fixed operating costs -- but that wasn't enough to repel negative analyst attention. Roth Capital and Benchmark downgraded the stock's rating to the equivalent of a "hold," while the latter was one of at least six brokerages to lower its price target. Moreover, GLUU is vulnerable to additional bearish notes in the future, since seven of the eight brokerage firms that tracked the stock as of yesterday's close deemed it a "strong buy." Making this possibility that much more likely is the shares' long-term underperformance, as they've surrendered two-thirds of their value year-over-year.
  • ILMN ​last night reported lackluster first-quarter earnings, bringing on a flurry of bearish attention from Wall Street. No fewer than six brokerage firms reduced their price targets on the stock, including Goldman Sachs, which is targeting two-year lows with its expected price of $125. Speaking of two-year lows, Illumina, Inc. hit one this morning at $127.10, with the shares last seen down 1.2% at $132.11, adding to a dreadful 2016. Elsewhere, some short sellers may be wondering why they threw in the towel so soon, since short interest fell by 10.5% during the two most recent reporting periods. 
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