Analyst Downgrades: Heron Therapeutics Inc, Kohl's Corporation, and Macy's Inc

Analysts downwardly revised their ratings and price targets on biotech Heron Therapeutics Inc (HRTX), as well as retail stocks Kohl's Corporation (KSS) and Macy's Inc (M)

Jan 5, 2017 at 9:46 AM
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Analysts are weighing in on biotech Heron Therapeutics Inc (NASDAQ:HRTX), as well as retail stocks Kohl's Corporation (NYSE:KSS) and Macy's Inc (NYSE:M). Here's a quick roundup of today's bearish brokerage notes on HRTX, KSS, and M.

  • HRTX is down 9.4% at $12.50, in spite of announcing positive mid-stage trial results for its post-surgery pain treatment, HTX-011, after the biotech forecast disappointing sales for its chemotherapy-induced nausea drug, Sustol. Following the disappointing forecast, HRTX was hit with a pair of price-target cuts, with Leerink slashing its price target to $21 from $34, and Jefferies cutting its price target to $29 from $40. Today's move puts Heron Therapeutics Inc down 40% from its most recent November peak, and short sellers are likely cheering today's tumble, with HRTX's short interest up 1.7% over the last two reporting periods, and now accounting for 20 days' worth of trading volume, at HRTX's average daily pace. 

  • KSS is down 17.9% at $42.61, after downwardly revising its full-year forecast for 2016, based on lackluster holiday sales. KSS has since been hit with a pair of downgrades, as well as no fewer than 12 price-target cuts, including a cut to "market perform" from "outperform" by Telsey, which also slashed its price target to $47 from $58. KSS is now down more than 28% since touching an annual peak in early December, erasing its November post-earnings bull gap and on pace to end beneath its 160-day moving average for the first time since August. Kohl's Corporation's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 1.10, in the 66th percentile of its annual range, indicating a more bearish-than-usual sentiment in KSS' option pits. 

  • M is also trading lower after announcing disappointing holiday sales and slashing its full-year forecast, currently down 13.5% at $31.01. Macy's Inc also announced it would be closing 68 stores and cutting 10,000 jobs as part of its restructuring efforts. Like KSS, M was hit with a barrage of negative analyst attention, including a downgrade to "hold" from "buy" by Deutsche Bank, and no fewer than nine price-target cuts, including a drop to $32 from $40 by J.P. Morgan Securities. M is down more than 30% since its recent peak on Black Friday. In the option pits, buyers have been betting on more downside, with M's 50-day put/call volume ratio at the ISE/CBOE/PHLX sitting just 9 percentage points from an annual peak.
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