Vantiv Buying Worldpay; Goldman Cuts Tesla Price Target

Tesla stock has been defying skeptical analysts for a long time

Jul 5, 2017 at 9:27 AM
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Analysts are weighing in on payment processor Vantiv Inc (NYSE:VNTV), electric vehicle maker Tesla Inc (NASDAQ:TSLA), and bank stock Capital One Financial Corp. (NYSE:COF). Here's a quick roundup of today's bearish brokerage notes on shares of VNTV, TSLA, and COF. 

Vantiv, Worldpay Agree to $10B Deal

Britain's Worldpay agreed to terms of a potential merger with Vantiv, in a deal worth roughly $10 billion. Earlier this week, Worldpay said it'd received rival bids from Vantiv and JPMorgan Chase & Co. (NYSE:JPM), though the latter today said it doesn't plan to make an offer. Meanwhile, Stifel cut its price target on VNTV to $64 from $66. The shares have been mostly contained in a channel of lower highs and lows since peaking at a record high north of $66 in late April, with recent rebound attempts contained by their 20-week moving average. Vantiv stock closed at $62.51 in Monday's holiday-shortened session.

Although options volume on VNTV is extremely light on an absolute basis, near-term options traders are more put-heavy than usual. The stock's Schaeffer's put/call open interest ratio (SOIR) of 3.34 sits in the 99th percentile of its annual range, and peak put open interest at the July 60 strike -- home to more than 2,100 contracts -- could act as an added layer of short-term support on any pullbacks. 

Goldman Cuts Tesla Price Target After 1H Deliveries

After Monday's early market close, and just hours after Tesla CEO Elon Musk said the Model 3 will begin production, the company said it delivered just over 47,000 vehicles so far this year, in the lower end of its expected range. Tesla cited a "severe shortfall" in new batteries, but predicted second-half deliveries to exceed first-half numbers. Ahead of the bell, TSLA stock is pointed 1.2% lower, but could find an ally in its 40-day moving average, which helped the shares to a record high of $386.99 not even two weeks ago.

Goldman Sachs analyst David Tamberrino reportedly cut his price target on TSLA stock to $180 from $190, and maintained a "sell" rating. Meanwhile, Cowen analyst Jeffrey Osborne -- who already considers TSLA an "underperform" with a $155 price target -- said he expects "institutional investors to lighten up on Tesla in the coming months as the risk profile shifts to production of the Model 3 and away from a 'story stock' of rhetoric ... and all of Musk's grand plans." Of course, that's nothing new for Tesla. The stock has been defying skeptical analysts for some time now, as 11 of 16 consider it a tepid "hold" or worse.

COF Stock Downgraded at Wedbush

Wedbush downgraded Capital One Financial stock to "underperform" from "neutral," and cut its price target to $80 from $94 -- a discount to COF's close of $83.56 on Monday. Wedbush said the firm's "return of capital measures even in a good year" are "sub-optimal," and made negative comparisons to Capital One's peers. In fact, COF was among the very few bank stocks singled out last week, after the Fed said the firm must resubmit its capital plan following the latest round of stress tests. And while many other bank stocks are positive year-to-date, COF shares are sitting on a loss of 4.2%.

Additional downgrades could pressure the stock even lower. Despite COF's underperformance, half of the analysts following the shares maintain a "strong buy" opinion.


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