VeriFone Systems, Zumiez, Ulta Beauty Downgraded

VeriFone Systems, Zumiez Inc., and Ulta Beauty received bearish analyst attention ahead of today's open

Josh Selway
Mar 10, 2017 at 10:16 AM
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Analysts are weighing in on payment processor VeriFone Systems Inc (NYSE:PAY), retail name Zumiez Inc. (NASDAQ:ZUMZ), and cosmetics stock Ulta Beauty Inc (NASDAQ:ULTA). Here's a quick roundup of today's bearish brokerage notes on PAY, ZUMZ, and ULTA shares.

Analysts React to VeriFone Systems Earnings Results

Shares of PAY are down 5.8% this morning at $19.16, after the company's quarterly earnings release last night. While Craig-Hallum, Raymond James, and Morgan Stanley all raised their price targets, BTIG downgraded the stock to "neutral" from "buy." VeriFone Systems Inc is already down 32% year-over-year, and could come under more pressure if short sellers continue to climb aboard. That is, short interest on PAY stock rose by 14.6% during the last two reporting periods, and now stands at an all-time high.  

Sales Forecast Sinks Zumiez Stock

ZUMZ has shed 16.5% this morning to trade at $17.54, after the company reported a weaker-than-expected current-quarter sales forecast. Analysts were quick to respond, with no fewer than four brokerage firms cutting their outlooks, including price-target cuts to $19 from Mizuho and Jefferies. The latter firm cited "weak mall traffic, an intensely promotional environment, and lack of dominant fashion trends." Zumiez Inc. has now given up the formerly supportive 200-day moving average, and is on pace for its lowest close since September. This move is just fine with bearish options traders, though, as more than seven puts were bought to open for every call during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). 

Ulta Beauty Stock Shakes Off Guidance Concerns

ULTA has already explored both sides of breakeven this morning -- last seen 3.1% higher at $282.37 after earlier notching a fresh all-time high of $283.76 -- as the shares overcome a full-year forecast Jefferies deemed "a bit light vs. high expectations." The brokerage firm also lowered its price target to $266 from $270, though Goldman Sachs upped its target to $311 from $290. Looking back, Ulta Beauty Inc has been brilliant on the charts, gaining more than 47% year-over-year. Most analysts are already bullish on ULTA, with 11 "strong buy" ratings on the books, though the remaining seven covering brokerage firms sit on the fence with tepid "hold" opinions. 

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