Analyst Downgrades: Apple Inc., Fitbit Inc, and Vertex Pharmaceuticals Incorporated

Analysts downwardly revised their ratings and price targets on Apple Inc. (AAPL), Fitbit Inc (FIT), and Vertex Pharmaceuticals Incorporated (VRTX)

by Kirra Fedyszyn

Published on Sep 29, 2016 at 9:21 AM

Analysts are weighing in on tech stocks Apple Inc. (NASDAQ:AAPL) and Fitbit Inc (NYSE:FIT), as well as drugmaker Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). Here's a quick roundup of today's bearish brokerage notes on AAPL, FIT, and VRTX.

  • Barclays removed AAPL from its "Top Pick" list, while cutting its price target on the stock by $1 to $114 -- in line with Wednesday's close at $113.95. The brokerage firm noted that Apple Inc. stock could be overbought after rallying more than 7% in September. Additionally, Barclays suspects global smartphone sales could be slow to recover, noting "late 2016 could be similar to late 2015 when smartphone builds fell precipitously." This marks a change of pace from yesterday's upbeat analyst attention, and analysts' opinions of AAPL in general. At present, 29 out of 34 brokerage firms maintain a "buy" or better rating on the iPhone maker, which is set to slide 0.6% at the open.
  • FIT is down 4.4% in pre-market trading after Pacific Crest downgraded the stock to "underweight," citing a "disappointing start" to sales of Fitbit Inc's Charge 2 fitness tracker. An analyst at the firm also noted that "a large portion of Fitbit owners stop using the device within months, which is a fundamental issue driving high churn and that will make growth more challenging." FIT is down nearly 44% year-to-date, as of last night's finish at $16.70 -- and today's projected price move could have the stock testing newfound support above the $16 level. Meanwhile, over the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 4.04 FIT calls for each put. Moreover, the resulting call/put volume ratio sits higher than 70% of all readings in the past year.
  • At least four brokerage firms have lowered their price targets on VRTX. This comes after the company announced last night that its cystic fibrosis treatment, ORKAMBI, has been approved for use in children aged 6-11 -- but downwardly revised its 2016 sales forecast for the drug. Goldman Sachs set the lowest target at $88, just below the stock's Wednesday close at $88.84 -- down 29.4% on the year. Still, 10 out of 14 analysts call Vertex Pharmaceuticals Incorporated a "buy" or better, without a "sell" in sight. Though options volume on the stock is typically light, speculators have taken a sharply call-skewed approach toward options set to expire in the next three months. VRTX's Schaeffer's put/call open interest ratio (SOIR) of 0.31 sits just 2 percentage points from an annual low.
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