Analyst Downgrades: Twitter Inc, Mylan NV, and Nike Inc

Analysts downwardly revised their ratings and price targets on Twitter Inc (TWTR), Mylan NV (MYL), and Nike Inc (NKE)

Sep 23, 2016 at 9:52 AM
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Analysts are weighing in on microblogging name Twitter Inc (NYSE:TWTR), EpiPen parent Mylan NV (NASDAQ:MYL), and Dow stock Nike Inc (NYSE:NKE). Here's a quick roundup of today's bearish brokerage notes on TWTR, MYL, and NKE.

  • TWTR has soared nearly 20% to trade at $22.35, as takeover chatter overshadows a downgrade to "underperform" from "sector perform" and price-target cut to $14 from $17 at RBC -- with the brokerage firm citing "waning" interest from advertisers. Nevertheless, the shares have jumped through previous resistance in the $20-$21 range, after CNBC reported a buyout bid may be on the immediate horizon for Twitter Inc, with Alphabet Inc (NASDAQ:GOOGL) and salesforce.com, inc. (NYSE:CRM) on the short list of possible suitors. Today's bull gap could have short sellers rushing to cover. Although short interest declined 11.5% in the most recent reporting period, it still accounts for a healthy 8.7% of TWTR's available float.
  • Deutsche Bank lowered its price target on MYL to $58 from $60, although this still represents expected upside of 36% to the stock's current price at $42.59. Technically, the shares have plunged 15.5% since their most recent high of $50.40 in early August, amid a price-gouging scandal. However, MYL stock has been fighting back in recent sessions, as traders largely brushed off CEO Heather Bresch's testimony on Capitol Hill. On the sentiment front, short-term options traders are more call-skewed than usual. Mylan NV's Schaeffer's put/call open interest ratio (SOIR) of 0.56 ranks lower than 87% of all comparable readings taken in the past year.
  • NKE is down 0.6% at $55.09, after Canaccord Genuity cut its price target on the stock to $52. from $56. While the brokerage firm said Nike Inc's fiscal first-quarter earnings will likely beat expectations next Tuesday night, it believes a number of factors -- including increasing competition from adidas and Under Armour Inc (NYSE:UA) -- will negatively impact future orders. As such, it also lowered its full-year earnings forecast for NKE.

    While the majority of analysts maintain a "strong buy" rating on the shares, a number of brokerage firms have been changing their tune as the stock widens its 12% year-to-date deficit. Options traders have shown a bias toward long puts over calls, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE's 10-day put/call volume ratio of 1.30 ranks in the 82nd annual percentile.
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