Analyst Downgrades: Apple Inc., Chipotle Mexican Grill, Inc., and Pandora Media Inc

Analysts downwardly revised their ratings and price targets on Apple Inc. (AAPL), Chipotle Mexican Grill, Inc. (CMG), and Pandora Media Inc (P)

by Alex Eppstein

Published on Oct 26, 2016 at 9:12 AM

Analysts are weighing in on blue chip Apple Inc. (NASDAQ:AAPL), restaurant operator Chipotle Mexican Grill, Inc. (NYSE:CMG), and music discovery stock Pandora Media Inc (NYSE:P). Here's a quick roundup of today's bearish brokerage notes on AAPL, CMG, and P.

  • AAPL is pointed 3.3% lower pre-market, as an earnings beat gets overshadowed by a third straight quarterly decline in sales. Analysts are reacting differently to the report, with Stifel cutting its rating to "hold" from "buy" and trimming its price target to $115 from $130, citing a weak iPhone sell-through rate and the lack of an upside catalyst. However, at least six other brokerage firms have upped their target prices on Apple Inc., which landed at $118.25 yesterday -- up 32% from its mid-May lows south of $90. Meanwhile, options traders have been setting their sights higher -- but potentially paying low prices -- per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, AAPL's 10-day call/put volume ratio of 2.23 rests only 8 percentage points from an annual peak.
  • CMG is poised to plunge 3.7% at the open, following an underwhelming earnings report and a round of bearish brokerage attention. Credit Suisse was among several analysts to weigh in negatively, reducing its rating to "neutral" and slashing its price target to $375 from $500. Likewise, BTIG expressed concerns over the chain's lagging sales, as well as "the timing and magnitude of many of the initiatives" implemented by the company to win back customers. Bucking the trend, Barclays boosted its price target on Chipotle Mexican Grill, Inc. to $405 from $395. Frankly, the stock has done little over the past 12 months to merit optimism, dropping 38.5% to $405.67. Not surprisingly, short interest has piled up on CMG, representing one-fifth of its float -- an amount that would take a whole week to buy back, at the stock's average trading level.
  • Ahead of the bell, P shares have sunk 8.9% in the wake of a wider-than-expected quarterly loss and weak guidance. Analysts aren't impressed, as evidenced by a downgrade to "underweight" at Albert Fried & Company, and at least six price-target reductions. RBC, however, is holding out hope, raising its target price on Pandora Media Inc to $14 from $13. Yesterday, the stock ended at $12.18, its lowest settlement price since late July. If short sellers have their druthers, losses will accelerate on P. Nearly 24% of the stock's float is dedicated to short interest, which would take two weeks to cover, at Pandora's typical pace of trading.
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