Analyst Update: Splunk Inc, Brocade Communications Systems, Inc., and Express Scripts Holding Company

Analysts revised their ratings and price targets on Splunk Inc (SPLK), Brocade Communications Systems, Inc. (BRCD), and Express Scripts Holding Company (ESRX)

Aug 26, 2016 at 1:12 PM
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Analysts are weighing in on software stock Splunk Inc (NASDAQ:SPLK), tech company Brocade Communications Systems, Inc. (NASDAQ:BRCD), and healthcare stock Express Scripts Holding Company (NASDAQ:ESRX). Here's a quick roundup of today's brokerage notes on SPLK, BRCD, and ESRX.

  • SPLK is down 10.4% at $58.31, after Stifel Nicolaus called out the company's lowest billings growth rate in more than three years, and its lowest license revenue growth rate in at least four years. As such, Stifel cut SPLK to "hold" from "buy," even as no fewer than seven other brokerage firms raised their price targets for Splunk Inc after last night's earnings. The shares are now in negative territory for the year, losing 0.5% so far in 2016, and are on pace to end the week beneath their 10-week trendline for the first time since mid-May. There are likely a few options players kicking rocks today, with SPLK's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 2.27 sitting in the 94th percentile of its annual range, suggesting a prevailing bullish sentiment towards the stock over the past 10 weeks. 
  • BRCD is plummeting in the wake of a lackluster current-quarter revenue forecast, currently down 11.4% at $9.26, and has landed itself on the short-sale restricted list. Goldman Sachs called the company's quarterly earnings report "disappointing," and cut its price target to $8.50 from $10, as did J.P. Morgan Securities. No fewer than nine other analysts have raised their price targets on the tech stock, though, including a jump to $13 from $11 by Craig Hallum, which represents a 40% premium on the current price and a 14-year high. BRCD is now testing its 200-day moving average, although the shares are still up over 20% since their May lows. Ahead of earnings, most analysts were skeptical towards the stock, with only three of 16 rating the shares a "buy" or better.
  • ESRX dropped nearly 6% yesterday -- and breached support at its 80-day moving average -- as concerns emerged that Mylan NV's (NASDAQ:MYL) EpiPen price cuts could weigh on ESRX profits. However, according to Street Insider (subscription required), Jefferies analyst Brian Tanquilut said the ESRX sell-off over MYL pricing was overdone. ESRX has, in fact, rebounded 0.7% to sit at $72.26 today, but still remains in negative territory for 2016, down 17.3%. In the option pits, calls were hot ahead of the MYL drama, with ESRX's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.45 sitting higher than 92% of all other readings from the past year. 
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