Analyst Update: Walt Disney Co, Marvell Technology Group Ltd., and Zafgen Inc

Analysts revised their ratings and price targets on Walt Disney Co (DIS), Marvell Technology Group Ltd. (MRVL), and Zafgen Inc (ZFGN)

Jul 20, 2016 at 12:24 PM
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Analysts are weighing in on blue chip Walt Disney Co (NYSE:DIS), semiconductor stock Marvell Technology Group Ltd. (NASDAQ:MRVL), and drugmaker Zafgen Inc (NASDAQ:ZFGN)Here's a quick roundup of today's brokerage notes on DIS, MRVL, and ZFGN.

  • DIS is down 1.4% at $98.07, pressured by a downgrade to "hold" from "buy" at Stifel. In fact, the stock is the worst-performing Dow component this afternoon. Separately, the parents of the boy killed by an alligator at a Walt Disney Co resort said they will not sue. It's been a rough 2016 for the shares, which have lost nearly 7% and have struggled at the $100 century level in recent months. Not surprisingly, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have taken a skeptical approach. DIS' 10-day put/call volume ratio of 1.45 rests just 5 percentage points from an annual peak.
  • MRVL reported better-than-expected earnings but disappointing sales, prompting a mixed round of analyst attention. On the one hand, Morgan Stanley, Jefferies, J.P. Morgan Securities, and Citigroup raised their price targets on the stock; on the other, Deutsche Bank cut its target price to $12 from $13. The bulls are certainly in the driver's seat this afternoon, though, with Marvell Technology Group Ltd. 15.3% higher at $11.36 -- on track for its highest close since August. Meanwhile, the stock is turning up the heat on bearish options traders, of which there are many. During the past two weeks at the ISE, CBOE, and PHLX, MRVL has racked up a put/call volume ratio of 2.26 -- just 2 percentage points shy of a 52-week high. From a volatility perspective, now remains a good time to buy short-term options, as MRVL's Schaeffer's Volatility Index (SVI) of 43% rests below 92% of all other readings from the prior year.
  • ZFGN has lost over half its value to trade at $3.27, and touched a record low of $3.23 earlier, after the drugmaker announced it's suspending development of its obesity treatment, beloranib. The news prompted a rush of negative analyst attention, including downgrades to "market perform" at Cowen and FBR. The latter was also one of at least three brokerage firms to slash its price target on Zafgen Inc. One group being handsomely rewarded by today's sell-off is short sellers, though the shares are currently short-sale restricted. Over 14% of ZFGN's float is sold short, or 6.4 times the stock's average daily trading rate.
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