Analyst Downgrades: Tesla Motors Inc, Smith & Wesson Holding Corp, and Alnylam Pharmaceuticals, Inc.

Analysts downwardly revised their ratings and price targets on Tesla Motors Inc (TSLA), Smith & Wesson Holding Corp (SWHC), and Alnylam Pharmaceuticals, Inc. (ALNY)

Oct 6, 2016 at 9:42 AM
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Analysts are weighing in on electric carmaker Tesla Motors Inc (NASDAQ:TSLA), gun stock Smith & Wesson Holding Corp (NASDAQ:SWHC), and biotech Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). Here's a quick roundup of today's bearish brokerage notes on TSLA, SWHC, and ALNY.

  • TSLA is down 3% at $202.09, following a downgrade to "neutral" from "buy" at Goldman Sachs, which also cut its price target to $185 from $240. The brokerage specifically cited the merger of Tesla Motor Inc and SolarCity Corp (NASDAQ:SCTY), saying the combination of "two high growth, high cash burn businesses, creates a higher risk entity." Furthermore, Goldman Sachs lowered its rating on the auto sector as a whole to "cautious" from "neutral," noting expectations for earnings to slow in the next two years due to declining prices and production.

    TSLA is currently sitting on a 16% year-to-date loss, and ran into trouble at its previously supportive 80-day moving average earlier this week. But while short sellers have jumped on the stock, options traders continue to target long calls. Specifically, TSLA's 10-day call/put volume ratio of 1.24 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 85th percentile of its 12-month range.
  • Wunderlich cut its rating on SWHC to "hold" from "buy," and its price target to $29 from $36, citing a slide in consumer demand. As such, Smith & Wesson Holding Corp is off 3.1% at $25.29 -- a three-month low -- and has pared its year-to-date advance to 15%. The shares could find support at their 200-day moving average, though, which helped contain a June pullback. Despite long-term outperformance, however, short interest on SWHC has recently climbed. These bearish bets rose by more than 12% during the most recent two-week reporting period, and now represent a healthy 16.6% of the stock' available float.
  • ALNY has dropped 47% to trade at $37.31 -- fresh off a three-year low of $37.02 -- after the company announced it will discontinue a study of its hereditary ATTR amyloidosis drug, due to concerns over patient safety. The news was met with a round of bearish brokerage notes, including a downgrade to "market perform" from "outperform" and price-target cut to $40 from $107 at Leerink. Heading into today's trading, Alnylam Pharmaceuticals, Inc. was already off 25% in 2016, but analysts had high hopes. Of 11 firms providing coverage, nine gave the stock a "buy" or better rating, compared to two "holds," and not a single "sell."
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