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The FAANG Stock Fumbling After Earnings; 2 Sports Stocks Downgraded

Morgan Stanley takes a jab at Under Armour stock with a "sell" rating

Jul 25, 2017 at 10:44 AM
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Analysts are weighing in on Google parent Alphabet Inc (NASDAQ:GOOGL), athletic clothing concern Under Armour Inc (NYSE:UAA), and sporting goods outlet Dicks Sporting Goods Inc (NYSE:DKS). Here's a quick roundup of today's bearish brokerage notes on shares of GOOGL, UAA, and DKS.

Alphabet Stock Falls Amid Cost Concerns

Last seen trading down 3% at $968.89, Alphabet stock is reeling after earnings, amid concerns about growing costs. As such, GOOGL stock has seen its price target cut by no fewer than five brokerage firms since Monday's close, including Morgan Stanley, which cut its price target on GOOGL to $1,040.

GOOGL stock has a positive outlook coming from was adored by analysts ahead of earnings, with more than 95% carrying a "buy" or better rating. The FAANG stock yesterday topped $1,000 in intraday trading for the first time since its early June highs, but today is set to close beneath its 10-day moving average for the first time in more than two weeks.

UAA Stock Downgraded to "Sell"

Deutsche Bank downgraded Under Armour stock to "sell" from "hold," sending the shares down 0.4% to trade at $20.18. UAA stock yesterday was hit by sector headwinds, after Hibbett Sports issued a same-store sales warning. The shares of Under Armour -- which reports earnings a week from today -- are testing support at the round-number $20 region, which contained their pullback in mid-June, and has emerged as a floor in July.

While UAA yesterday saw accelerated put activity, long calls have been the options of choice. Under Armour stock sports a 50-day call/put volume ratio of 1.00 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- higher than 80% of all other ratios in the past 12 months, indicating an accelerated appetite for bullish bets over bearish.

Telsey Downgrades DKS Stock

Telsey Advisory Group downgraded Dick's Sporting Goods to "market perform" from "outperform," and cut its price target to $40 from $52. As with UAA, DKS stock was also slammed by the Hibbett warning, touching an annual low of $34.55 yesterday. Today, DKS is attempting to pare some of those losses, up 0.4% at $35.25. Nevertheless, the shares remain roughly 34% lower year-to-date.

Additional downgrades could be in store for Dick's Sporting Goods stock, though. Despite the equity's dismal performance on the charts, 13 out of 22 analysts maintain "buy" or better ratings, with not one "sell" recommendation in sight.

 
 

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