Caterpillar, Urban Outfitters, Vera Bradley News Today

Caterpillar Inc. (CAT), Urban Outfitters, Inc. (URBN), and Vera Bradley, Inc. (VRA) are making headlines today

by Alex Eppstein

Published on Mar 8, 2017 at 9:30 AM
Updated on Mar 8, 2017 at 9:33 AM

An upbeat ADP employment report could boost stocks today, and strengthen the case for a Fed rate hike next week. Among specific equities in focus today are Dow stock Caterpillar Inc. (NYSE:CAT), retailer Urban Outfitters, Inc. (NASDAQ:URBN), and accessories designer Vera Bradley, Inc. (NASDAQ:VRA). Here's a quick look at the news driving CAT, URBN, and VRA shares.

Caterpillar Tax Fraud Allegations Intensify

CAT is battling fresh accusations of tax fraud, just days after a federal raid at three corporate facilities. The news has the stock down 2% pre-market, after it settled yesterday at $95.93 -- but it could find a familiar foothold at its 100-day moving average out of the gate. Year-over-year, the shares have outperformed, adding more than 28%. Separately, Caterpillar Inc. and Trimble Inc (NASDAQ:TRMB) announced they are partnering to bring on-highway telematics to construction operations. Options traders have been betting on losses for CAT shares. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has amassed a top-heavy 10-day put/call volume ratio of 2.54 -- in the top quartile of its annual range. If the equity bounces from the aforementioned trendline, though, a capitulation among these bears could translate into tailwinds.

Urban Outfitters Stock Eyes Post-Earnings Lows

URBN is pointed 7.8% lower ahead of the open, after a lackluster earnings report. As such, the retail stock -- which closed at $25.41 on Tuesday -- could touch an annual low out of the chute. Making matters worse, William Blair downgraded the stock to "market perform" from "outperform," while no fewer than 10 brokerage firms cut their price targets on Urban Outfitters, Inc., including Goldman Sachs (to $21 from $22), which explained "Q1 is off to a soft start, with comps at Urban Outfitters and Anthro on track to decline about low-single digits for the quarter while gross margins could decline around -140 bps." Short sellers should welcome these bearish developments. Over 12% of URBN's total float is sold short, which would take over a week to cover, at the stock's average daily trading level.

Comp Sales, Outlook Slam Vera Bradley Shares

Disappointing fourth-quarter revenue and a soft forecast are pressuring shares of VRA, which cited a "challenging" fourth-quarter retail environment. In addition, same-store sales decreased 9.5% year-over-year. Not surprisingly, Vera Bradley, Inc. is down nearly 9% pre-market, setting up the stock for a record low this morning, following yesterday's close at $9.32. Options traders have seemingly been eyeing a sharp pullback. At the ISE, CBOE, and PHLX, speculators have bought to open 10,645 VRA puts in the past two weeks, versus just 127 calls.

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