Analyst Downgrades: Valeant Pharmaceuticals Intl Inc, Chipotle Mexican Grill, Inc., and VeriFone Systems Inc

Analysts downwardly revised their ratings and price targets on Valeant Pharmaceuticals Intl Inc (VRX), Chipotle Mexican Grill, Inc. (CMG), and VeriFone Systems Inc (PAY)

Jun 8, 2016 at 10:20 AM
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Analysts are weighing in on biotech Valeant Pharmaceuticals Intl Inc (NYSE:VRX), restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG), and electronic payment technology stock VeriFone Systems Inc (NYSE:PAY). Here's a quick roundup of today's bearish brokerage notes on VRX, CMG, and PAY.

  • VRX is down 2.6% at $24.03, after no fewer than eight brokerage firms issued price-target cuts. The biopharmaceutical stock plunged nearly 15% yesterday -- and hit a five-year low of $22.52 -- after releasing a disappointing (and delayed) earnings report and lowering its 2016 earnings forecast. In addition, the company's top shareholder said it slashed its stake, making activist Bill Ackman's Pershing Square Capital No. 1. Valeant Pharmaceuticals Intl Inc has been struggling to overcome a price gouging scandal, even appointing new CEO Joseph Papa, but the biotech is still down nearly 90% over the past year. VRX shares have underperformed the greater S&P 500 Index (SPX) by nearly 66 percentage points over the last 60 sessions, and short interest in the stock is up over 44% over the last two reporting periods. VRX bulls have kept the faith, however, with Valeant Pharmaceuticals Intl Inc's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 1.99 sitting higher than 98% of all other readings taken in the past 12 months.

  • CMG is down 2.2% at $424.00, after Maxim reiterated its "sell" recommendation and slashed CMG's price target to $285 from $300 -- a discount of 33% from the stock's current price. The fast-food chain has been struggling to make up ground after a slew of food-borne illness outbreaks were linked to its restaurants, and even extensive, expensive promotions haven't been enough to pull the stock back into the black for the year. The shares have dropped 30% over the past 12 months, and is testing a floor in the $420 area, which contained a pullback in April. Still, near-term traders have been more call-skewed than usual, with CMG's Schaeffer's put/call open interest ratio (SOIR) of 0.92 sitting lower than 77% of all other readings from the past year.

  • PAY is down a staggering 29.9% at $19.80 -- a two-year low --  after the company slashed its 2016 earnings expectations and announced job cuts and a strategic review of underperforming units. Pacific Crest, Barclays, J.P. Morgan Securities, Compass Point, and Monness Crespi Hardt downgraded VeriFone Systems Inc, while the stock also received no fewer than 12 price-target cuts. Prior to today, analysts seemed optimistic towards the payment solutions provider, with 12 of 14 rating PAY a "buy" or better, and not a single "sell" in sight. In the options pits, bears have been hot on the stock, with PAY's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.7 sitting in the 89th percentile of its annual range.
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