Buzz Stocks: Kroger Co, Lexicon Pharmaceuticals, Inc., and Restoration Hardware Holdings Inc

Today's stocks to watch in the news include Kroger Co (KR), Lexicon Pharmaceuticals, Inc. (LXRX), and Restoration Hardware Holdings Inc (RH)

by Alex Eppstein

Published on Sep 9, 2016 at 9:24 AM

U.S. stocks could feel the heat today, with futures pointed lower after hawkish remarks from one Fed official. Among specific equities in focus are grocery giant Kroger Co (NYSE:KR), drugmaker Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), and retail stock Restoration Hardware Holdings Inc (NYSE:RH).

  • KR reported better-than-expected earnings, but the company's disappointing sales and downwardly revised guidance are weighing on the stock pre-market. Specifically, the shares are down 1% ahead of the bell, suggesting their recent sell-off -- which led to a fresh annual low of $30.70 yesterday, before settling at $31.31 -- may be far from over. Kroger Co could feel even more heat if bullish analysts jump ship. Right now, nine of the 16 brokerage firms tracking KR consider the stock a "buy" or better.
  • LXRX is poised to pop 17.6% at the open -- and into two-year-high territory --after promising Phase 3 trial results for its type 1 diabetes treatment, sotagliflozin. Suffice it to say, short sellers may could be on pins and needles this morning. A lofty 27.5% of Lexicon Pharmaceuticals, Inc.'s float is sold short, translating to nearly 13 sessions of trading activity, at the stock's average daily volume. In other words, the shares could be on the verge of a short-squeeze situation. Last night, LXRX closed at $15.31.
  • RH could explode this morning, after the retailer topped expectations in the earnings confessional (subscription required). This news prompted price-target hikes at no fewer than four brokerage firms, though Cowen broke from the pack, lowering its target to $33 from $35. Ahead of the open, Restoration Hardware Holdings Inc has gained 9.7%, and shareholders are desperate for a boost. Based on Thursday's settlement at $35.29, the stock is down nearly 56% on a year-to-date basis. On the other hand, short sellers could be left kicking rocks, as 28% of RH's float is dedicated to short interest.

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