The Restaurant Stock Pacing for a Seventh Straight Loss

Chipotle was slapped with another price-target cut ahead of earnings

Jul 24, 2017 at 10:41 AM
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Analysts are weighing in on Swiss healthcare company Novartis AG (ADR) (NYSE:NVS), restaurant stock Chipotle Mexican Grill, Inc. (NYSE:CMG), and sports bar and restaurant Buffalo Wild Wings (NASDAQ:BWLD). Here's a quick roundup of today's bearish brokerage notes on shares of NVS, CMG, and BWLD.

NVS Stock Moves Lower

Jefferies cut its price target on Novartis stock to 97 Swiss francs from 100 Swiss francs. This cut comes just after Friday's announcement that a U.S. jury sided with drug company Amphastar over Momenta -- a partner of Novartis' Sandoz unit -- in a drug patent trial.

NVS was last seen trading down 0.9% at $84.24, though the stock remains almost 17% higher year-to-date. In fact, NVS shares touched an annual high just over a month ago, and are now testing possible support around $84 -- an area that capped the stock's momentum in mid-2016. Meanwhile, Novartis stock's Schaeffer's put/call open interest ratio (SOIR) of 0.27 sits alone, at the lowest point of its annual range, suggesting near-term options traders have not been more call-biased during the past year. 

Rain Continues to Pelt Chipotle

Continuing its downward spiral, Chipotle stock saw its price target cut to $325 from $425 at Credit Suisse -- in four-year-low territory.This cut is far from shocking after the previous week for CMG, which included a Norovirus outbreak at a Virginia location, and reports of falling ceiling rats in a Texas restaurant.

CMG stock was last seen trading at $340.51, down 1.4%, and has fallen more than 16% in the past two weeks. The stock touched a four-year low of $338.88 earlier in the session, and is pacing for a seventh straight loss. Analysts following Chipotle stock are starting to lean toward the bears' camp, but eight analysts maintain "strong buy" opinions -- leaving the door wide open for additional downgrades, possibly in the wake of Chipotle's earnings report, slated for release after the close tomorrow.

Maxim Cuts BWLD Price Target Ahead of Earnings

Maxim cut its price target on Buffalo Wild Wings stock to $165 from $180. BWLD was last seen trading up 0.3% at $122.75, but is just a week off a three-year-low of $119.55. The stock has plummeted almost 25% in the past three months, yet options traders remain optimistic ahead of earnings on Wednesday.

BWLD stock sits with a low SOIR of 0.93, higher than only 4% of other ratios in the past 12 months, suggesting short-term option players have rarely been more call-heavy. Buffalo Wild Wings sports a 10-day call/put volume ratio of 3.56 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- higher than 96% of the past year's readings, suggesting options buyers have initiated bullish bets over bearish at a faster-than-usual clip during the past two weeks.

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