Analyst Downgrades: Carnival Corp, VeriFone Systems Inc, and Lululemon Athletica inc.

Analysts downwardly revised their ratings and price targets on Carnival Corp (NYSE:CCL), VeriFone Systems Inc (NYSE:PAY), and Lululemon Athletica inc. (NASDAQ:LULU)

by Josh Selway

Published on Sep 2, 2016 at 10:15 AM
Updated on Jun 24, 2020 at 10:16 AM

Analysts are weighing in on cruise ship operator Carnival Corp (NYSE:CCL), electronic payments specialist VeriFone Systems Inc (NYSE:PAY), and yoga apparel maker Lululemon Athletica inc. (NASDAQ:LULU). Here's a quick roundup of today's bearish brokerage notes on CCL, PAY, and LULU.

  • CCL is sinking this morning, dropping 49% at $46.33, after a downgrade to "underweight" from "equal weight" at Morgan Stanley, which also lowered its price target on the stock to $48 from $54. The brokerage firm noted a monthly survey that suggested weak demand for cruises in August -- a normally strong month. The losses bring Carnival Corp's year-to-date deficit to 15%, which is just fine with put traders. Specifically, CCL's 10-day put/call volume ratio of 3.20 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in higher than four-fifths of all readings from the past year. 
     
  • PAY is in the midst of a second straight post-earnings sell-off, after the company released a disappointing full-year outlook. A series of bearish analyst attention has ensued, including downgrades to "neutral" at both Piper Jaffray and Wedbush. Goldman Sachs was one of 10 brokerages to weigh in with a price-target cut, setting its target at $21, and saying "the company's fundamentals may take some time to improve." VeriFone Systems Inc was last seen 18.7% lower at $16.33 -- after hitting a fresh three-year low of $16.07 earlier -- bringing its year-over-year drop to roughly 47%. More bearish notes could be forthcoming, too, since the majority of covering analysts held a "buy" or better rating on PAY as of yesterday's close. 
  • LULU is also getting crushed this morning -- which is good news for short sellers -- as a second-quarter earnings beat is overshadowed by weak same-store sales and a disappointing outlook. Cannacord Genuity chimed in with a price-target cut to $65 from $70, saying it sees "risk skewed to the downside," while Wedbush raised its price target to $84 from $82. Still, Lululemon Athletica inc. is on pace for its biggest percentage drop since last December, down 9% at $69.78. At the same time, the round $70 level -- which isn't far from the stock's average 12-month price target of $72.90 -- may be able to offer support for LULU. 
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