Depomed, Valeant Pharmaceuticals, Hibbett Sports Downgraded

Depomed Inc (DEPO), Valeant Pharmaceuticals Intl Inc (VRX), and Hibbett Sports, Inc. (HIBB) have received bearish analyst attention on Wall Street

Feb 14, 2017 at 9:44 AM
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Analysts are weighing in on drugmakers Depomed Inc (NASDAQ:DEPO) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX), as well as retailer Hibbett Sports, Inc. (NASDAQ:HIBB). Here's a quick roundup of today's bearish brokerage notes on DEPO, VRX, and HIBB shares.

Depomed Dips on Downgrade

Mizuho cut its rating on DEPO to "neutral" from "buy," and slashed its price target to $17 from $24. As a result, the shares have slid 3.9% to $16.34, ahead of next Monday night's earnings report. It's been a rough ride for Depomed Inc, which has pulled back sharply since its late-September high north of $27. Given these technical troubles, it would seem the stock is vulnerable to additional downgrades. Five covering analysts rate DEPO a "strong buy," outweighing a pair of "holds" and just one "strong sell" recommendation.

RBC Trims Price Target on Valeant Pharmaceuticals

After VRX and Bill Ackman's Pershing Square Capital Management yesterday agreed to split legal costs in their fight with Allergan plc (NYSE:AGN), RBC cut its price target on Valeant Pharmaceuticals Intl Inc to $22 from $29. This still represents a sizable premium to the shares' current perch, last seen up 1.5% at $15.19 -- though they were north of $90 this time one year ago. Short-term options traders, meanwhile, have piled into the put side of the aisle. VRX's Schaeffer's put/call open interest ratio (SOIR) of 1.05 ranks just 14 percentage points from a 52-week peak.

Hibbett Sports Sinks to Lows on Preliminary Earnings, Guidance

HIBB has tanked 13.7% to trade at $28.70, and is fresh off an annual low of $28.55. Pressuring the shares is last night's weak preliminary earnings report, which included disappointing full-year profit guidance. Exacerbating losses, SunTrust Robinson and Susquehanna lowered their ratings to the equivalent of a "hold," and both were among a group of at least six analysts to cut their price targets. This negative news is overshadowing a recent Securities and Exchange Commission (SEC) filing, which revealed TimeSquare Capital Management has taken a 5.5% passive stake in Hibbett Sports, Inc. The stock is short-sale restricted out of the gate, but short sellers are already well acquainted with the shares. Roughly 23% of HIBB's float is dedicated to short interest, which would take nearly three weeks to cover, at typical daily volumes. 

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