Analyst Downgrades: Chipotle Mexican Grill, Inc., Visa Inc, and Yahoo! Inc.

Analysts downwardly revised their ratings and price targets on Chipotle Mexican Grill, Inc. (CMG), Visa Inc (V), and Yahoo! Inc. (YHOO)

by Alex Eppstein

Published on Oct 18, 2016 at 9:38 AM

Analysts are weighing in on restaurant operator Chipotle Mexican Grill, Inc. (NYSE:CMG), credit card concern Visa Inc (NYSE:V), and tech stock Yahoo! Inc. (NASDAQ:YHOO). Here's a quick roundup of today's bearish brokerage notes on CMG, V, and YHOO.

  • CMG saw its rating lowered to "underperform" from "market perform" at Raymond James, which said the company's sales reduction due to a recent rash of food-borne illnesses could represent "a new normal." Along the same lines, RBC slashed the stock's price target to $465 from $485, following in the bearish footsteps of Nomura. It's been a rough year for Chipotle Mexican Grill, Inc., which has lost almost 45% year-over-year at $396.88. This has worked out well for short sellers, of which there are many. One-fifth of CMG's float is sold short, which would take about a week to buy back, at the stock's usual trading volume. Looking ahead, Chipotle will report earnings next Tuesday night.
  • V announced a CEO succession plan last night. Goldman Sachs responded with a $1 price-target cut to $96, still in all-time-high territory for the shares. Overall, it's been a solid if unspectacular year for Visa Inc stock, which has added 5.5% in 2016 at $81.82, just a stone's throw from its Sept. 22 record peak at $83.79. Options traders have been bracing for a pullback, though, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, V's 50-day put/call volume ratio of 0.89 ranks just 3 percentage points from an annual high. Turning to the fundamental front, Visa will report earnings next Monday evening.
  • YHOO saw its rating lowered to "hold" from "buy" at Needham, which cited worries that Verizon Communications Inc. (NYSE:VZ) could walk away from or renegotiate its acquisition price due to a previously undisclosed 2014 hacking event. Needham said its concerns have been exacerbated by the "fact that YHOO canceled its 3Q16 earnings call," which originally would've followed tonight's scheduled data release. Yahoo! Inc. shares were last seen at $42.18.
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