Analyst Downgrades: Red Hat Inc, Alexion Pharmaceuticals, Inc., and Bed Bath & Beyond Inc.

Analysts downwardly revised their ratings and price targets on Red Hat Inc (RHT), Alexion Pharmaceuticals, Inc. (ALXN), and Bed Bath & Beyond Inc. (BBBY)

by Kirra Fedyszyn |

Published on Dec 22, 2016 at 10:10 AM

Analysts are weighing in on software stock Red Hat Inc (NYSE:RHT), biotech Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY). Here's a quick roundup of today's bearish brokerage notes on RHT, ALXN, and BBBY.

  • RHT has plunged 13.4% to trade at $69.08, as the company's lower-than-expected forecast and news its chief financial officer is leaving overshadows a quarterly earnings beat. What's more, Stifel and BMO cut their ratings on the stock to the equivalent of a "hold," while no fewer than 14 brokerage firms lowered their price targets. Additionally, an analyst at Baird said "with an already significant overall market share, that growth must eventually regress to the mean." Today's drop has Red Hat Inc widening its year-to-date loss to 16.6%, and trading below the $70 mark for the first time since March. But more negative analyst attention could still be on the way, with the vast majority of brokerage firms sitting on a "buy" or better rating. 

  • ALXN is 1.7% higher at $121.09, despite news the company's treatment for a post-kidney-transplant complication failed in a late-stage study. Alexion Pharmaceuticals, Inc. also saw its price target cut by at least five brokerages, including Goldman Sachs, which trimmed its target to $155 from $158 -- still a hefty premium above current trading levels. Near-term options traders are unusually put-heavy toward ALXN, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.14 -- higher than 88% of all readings from the past 12 months. The shares have shed nearly 37% so far this year, and are running out of steam today in the troublesome $121 level, an area that's rejected ALXN since its mid-December bear gap.

  • A disappointing turn in the earnings confessional has shares of BBBY off 5.9% at $42.96. Also weighing on the stock is a downgrade to "market perform" from "strong buy" at Raymond James -- which said the retailer "still has a long runway ahead of it before it will realize the benefits of its technology investments" -- as well as price-target cuts at Goldman Sachs and Telsey Advisory Group. Deutsche Bank, meanwhile, raised its price target by $6 to $48 -- a level BBBY retreated from earlier this month. Today's brokerage attention is nothing new, however -- only one of the 16 analysts following Bed Bath & Beyond Inc. recommends buying the shares. And while short interest fell by 16.6% in the most recent reporting period, these bearish bets still account for nearly 9% of the stock's available float, or 7.2 times BBBY's average daily volume.
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