Analyst Downgrades: Time Warner Inc, Baidu Inc, and Ariad Pharmaceuticals, Inc.

Analysts downwardly revised their ratings and price targets on Time Warner Inc (NYSE:TWX), Baidu Inc (ADR) (NASDAQ:BIDU), and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)

by Josh Selway

Published on Oct 24, 2016 at 10:34 AM

Analysts are weighing in on media giant -- and M&A target -- Time Warner Inc (NYSE:TWX), internet search provider Baidu Inc (ADR) (NASDAQ:BIDU), and drugmaker Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). Here's a quick roundup of today's bearish brokerage notes on TWX, BIDU, and ARIA.

  • Wall Street is weighing in on TWX, after the company agreed to be bought by AT&T Inc. (NYSE:T) in a cash-and-stock deal valued at roughly $85 billion, or $107.50 per share. Goldman Sachs, for instance, joined a few other brokerage firms in raising its price target -- setting it at $103 -- but removed TWX stock from its "Americas Conviction Buy" list, and downgraded it to "neutral" from "buy." Time Warner Inc was also downgraded to "neutral" at Credit Suisse and MKM Partners -- with the former anticipating intense scrutiny from regulators -- while J.P. Morgan Securities took TWX off its "U.S. Analyst Focus" list. Not to mention, the M&A news has already been met with heavy criticism from Washington, with Independent Senator Bernie Sanders of Vermont saying the Obama administration should stop the merger.
     
    After all this, TWX shares are down 2% at $87.68, giving back some of the gains the stock notched on Friday, when the M&A rumors began circling. Still, the stock is 36% higher in 2016, and not a single analyst has a "sell" recommendation on the shares. Separately, Time Warner is slated to announce earnings the morning of Wednesday, Nov. 2. 
  • BIDU is up 1.6% at $179.50, as a price-target reduction to $193 from $201 at Deutsche Bank is overshadowed by a price-target hike to $201 from $194 at Goldman Sachs. Shares of BIDU are 5% lower year-to-date, but options traders have been taking a bullish approach lately. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Baidu Inc has accumulated a call/put volume ratio of 2.15, which tops 90% of all others from the past year. Looking ahead, the company is expected to report earnings after the close on Thursday. 
  • A downgrade to "underweight" from "neutral" at J.P. Morgan Securities has pressured ARIA 6.6% lower to $9.70. The brokerage firm also cut its price target to $7 from $8, echoing the stock's recent technical woes. More specifically, ARIA was trading above $14 just two weeks ago, and the sudden drop has analysts growing wary. Meanwhile, short sellers are hoping the downtrend continues, since almost 17% of the stock's float is sold short. The biotech firm is tentatively scheduled to report earnings next week. 
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