3 Stocks Reeling This Morning

OTIC stock swung from an annual high yesterday to a record low today

by Emma Gilkey

Published on Aug 30, 2017 at 10:33 AM
Updated on Jun 24, 2020 at 10:16 AM

U.S. stocks are trading up modestly after this morning's upwardly revised second-quarter gross domestic product (GDP) reading. However, several equities are wallowing in red ink, including retail stock Chico's FAS Inc. (NYSE:CHS), telecom contracting company Dycom Industries, Inc. (NYSE:DY), and drug concern Otonomy Inc (NASDAQ:OTIC). Here's a quick look at what's pressuring shares of CHS, DY, and OTIC.

CHS Stock Drops Following Earnings Miss

Chico's stock is trading lower, after the retailer reported lower-than-expected second-quarter earnings and revenue just before today's open. Continuing a bearish trend for retail stocks, CHS is trading down 5.2% at $7.42 -- fresh off an eight-year low of $6.96 -- bringing its year-to-date loss to 48.4%.

Not surprisingly, options traders are bearish on the stock. The equity's Schaeffer's put/call open interest ratio (SOIR) of 4.26 ranks higher than 97% of all comparable readings from the past 12 months. This indicates that short-term CHS options players have rarely been more put-heavy in the past 52 weeks.

A Dreary Profit Forecast Has DY Stock Spiraling

DY shares are also in the red this morning -- down 7.7% at $75.74 -- as disappointing fiscal fourth-quarter revenue and a lower-than-forecast current-quarter profit forecast overshadow a quarterly earnings beat. Dycom Industries is now in the red on a year-to-date basis, and has shed 31.5% since notching a record high near $111 in late May. A round of downgrades could create more pressure, with five of seven brokerages maintaining "strong buy" recommendations, while the two others sport tepid "hold" ratings.

OTIC Stock Gets Clobbered After Suspended Drug Trial

Otonomy is in headlines, after the company's ear drug failed key trial -- causing it to suspend development of its Meniere's disease treatment. OTIC shares are down a catastrophic 80.8% to trade at $4.00 -- hitting a record low of $3.45 earlier. This shocking fall comes just after OTIC reached a 19-month high of $21.15 yesterday.

Given the major setback, it's likely analysts will chime in, considering all four brokerages following the pharma stock carried "strong buy" ratings at yesterday's close. Plus, the average 12-month price target for OTIC stock is currently docked at $40.

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