Valeant, Tesla, Urban Outfitters Downgraded

Valeant Pharmaceuticals Intl Inc (VRX), Tesla Inc (TSLA), and Urban Outfitters, Inc. (URBN) are under the gun from analysts

Feb 27, 2017 at 10:07 AM
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Analysts are weighing in on drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), electric car concern Tesla Inc (NASDAQ:TSLA), and retail stock Urban Outfitters, Inc. (NASDAQ:URBN). Here's a quick roundup of today's bearish brokerage notes on VRX, TSLA, and URBN shares.

Valeant Shares Brush Off Price-Target Cut

Mizuho Securities reduced its price target on VRX to $9 from $11. Nevertheless, the shares have pushed 2.1% higher to trade at $16.52, on news Valeant Pharmaceuticals Intl Inc has increased the sales force for subsidiary Salix Pharmaceuticals by almost 40% to "accelerate further growth," according to VRX CEO Joseph Papa. The stock has been staging a rebound since bottoming at its most recent low of $13.16 in late January -- up 20% on the month -- thanks to support from its 10-day moving average. Short sellers are likely hoping this positive price action stalls. Short interest surged 17% in the most recent reporting period, and now accounts for 12% of VRX's available float. Where the shares go next could be determined by tomorrow morning's earnings report.

3 Reasons Goldman Sachs is Bearish on Tesla

TSLA was downgraded to "sell" from "neutral" at Goldman Sachs, which also lowered its price target by $5 to $185. While the brokerage firm said it believes Tesla Inc has a leg up on its peers, it is concerned with "operational execution on the Model 3 launch, an unproven solar business, and cash needs." While TSLA shares are trading 5.5% lower at $242.76, they seem to have found a foothold in the $240 region, home to their mid-January highs. And should the stock resume its longer-term uptrend -- TSLA has surged 26.5% year-over-year -- there's plenty of skepticism to be unwound. For example, more than 82% of analysts maintain a "hold" or worse rating, leaving the door wide open for upgrades to boost TSLA shares higher.

Anthropologie Concerns Weigh on Urban Outfitters

MKM Partners lowered its rating on URBN to "sell" and its price target to $20, citing decreased sales and margin expectations at the retailer's Anthropologie division. Against this backdrop, shares of URBN have dipped 0.5% to trade at $26.74. More broadly, the stock has surrendered 34% since topping out at a 12-month high of $40.80 in mid-November. In the options pits, meanwhile, short-term speculators have rarely been as call-skewed toward Urban Outfitters, Inc. as they are now. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.68 ranks lower than 98% of all comparable readings taken in the past year.

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