Valeant Pharmaceuticals, GoDaddy, Molina Healthcare Downgraded

Valeant Pharmaceuticals Intl Inc (VRX), GoDaddy Inc (GDDY), and ​Molina Healthcare, Inc. (MOH) have received bearish analyst attention on Wall Street

Feb 16, 2017 at 9:47 AM
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Analysts are weighing in on drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), domain marketplace GoDaddy Inc (NYSE:GDDY), and Medicaid stock Molina Healthcare, Inc. (NYSE:MOH). Here's a quick roundup of today's bearish brokerage notes on VRX, GDDY, and MOH shares.

Valeant Drug "Dead in the Water"?

VRX received Food and Drug Administration (FDA) approval for its plaque psoriasis drug Siliq, but according to Mizuho, the treatment is "dead in the water." In a note to clients, the brokerage firm said, "based on our read of the label, we believe that prescribing information may be even more restrictive than expected," and that the drug will likely not help drive growth. As such, Mizuho reiterated its "underperform" rating and $11 price target. Wells Fargo also repeated its "underperform" rating, saying traders should "sell the news." Against this backdrop, Valeant Pharmaceuticals Intl Inc is down 2% at $16.53, despite recently flashing a "buy" signal. Most analysts echo Mizuho's skepticism, with nine maintaining "hold" ratings and another three sporting "strong sells" -- outweighing just a pair of "buy" endorsements.

GoDaddy Caves on Earnings, Downgrade

GDDY has bombed 4.7% to trade at $35.72, following a surprise fourth-quarter loss. Making matters worse, Summit Redstone lowered its opinion to "hold" from "buy" -- though Raymond James bumped its price target up $5 to $42, record-high territory. In spite of today's setback, GoDaddy Inc shares have advanced a healthy 22% year-over-year. Yet, short-term options traders are very put-skewed toward the stock. GDDY's Schaeffer's put/call open interest ratio (SOIR) of 1.94 sits just 1 percentage point from a 12-month peak.

Quarterly Loss Rocks Molina Healthcare Shares

MOH has plummeted 14.2% to $51.38 and landed on the short-sale restricted list, following a surprise quarterly loss and weak 2017 forecast -- which the company blamed on the Affordable Care Act (ACA), also known as Obamacare. Stifel responded to the earnings report by lowering its rating to "hold" from "buy," and slashing its price target to $45 from $64. Molina Healthcare, Inc. shares are now flirting with their lowest levels since mid-November. This should come as a welcome development for put players. MOH's SOIR registers at a top-heavy 5.34, in the 100th percentile of its annual range -- meaning short-term put open interest outweighs call open interest by an extreme margin.

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