Cara Therapeutics Stock Tanks; Tesla CEO Teases 'News on Sunday' stock has been prone to big moves on the charts

Jun 30, 2017 at 9:58 AM
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Analysts are weighing in on drugmaker Cara Therapeutics Inc (NASDAQ:CARA), electric vehicle maker Tesla Inc (NASDAQ:TSLA), and Chinese e-commerce concern Inc (ADR) (NYSE:WUBA). Here's a quick roundup of today's bearish brokerage notes on shares of CARA, TSLA, and WUBA. 

CARA Stock Slammed After Drug Data

Cara Therapeutics stock has plummeted 27.9% to trade at $18.40, after the company reported disappointing data on its chronic pain drug, CR845. CARA stock earlier this week notched a record high of $28.50, after barreling through recent resistance in the $20-$21 region. Adding salt to Cara Therapeutics' wounds, Janney downgraded the stock to "neutral" from "buy," and trimmed its price target by $1 to $21. On the other hand, Canaccord Genuity reiterated its "buy" rating and $25 price target, citing signs of effectiveness in the drug.

And while the stock is short-sale restricted today, short sellers have to be cheering today's price action. The 8.4 million CARA shares sold short is almost eight times the stock's average daily trading volume. 

Elon Musk Tweet Hints at Impending Model 3 Update

When asked about the Model 3 release date on Twitter, Tesla CEO Elon Musk simply tweeted "News on Sunday." Nevertheless, Goldman Sachs analyst David Tamberrino reportedly expects TSLA stock to sink ahead of the Model 3 launch, maintaining a "sell" rating (subscription required) and $190 price target.

Of course, that's not an anomaly: most analysts remain bearish on Tesla stock, even though it's up roughly 71% year-to-date at $365.22. By the numbers, 69% of covering brokerage firms rate the shares a "hold" or worse. If TSLA keeps rising, it could force these skeptics to upwardly revise their outlooks, which would result in tailwinds. 

WUBA Stock Downgraded at Morgan Stanley

Morgan Stanley downgraded stock to "underweight" from "equal weight," and cut its price target to $40 from $42. WUBA stock has rallied almost 55% in 2017, but is running into a wall at its 80-week moving average -- a trendline that's contained the equity since May 2016. Today, the shares have shed 2.3% to trade at $43.37, but they've been prone to big moves on the charts over the past year. For example, has a Schaeffer's Volatility Scorecard (SVS) of 98, telling us options traders have consistently underpriced its ability to make outsized moves over the last 52 weeks. 

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