Telsey Turns on Chipotle; Teva Pharmaceutical Stock Tries to Bounce

Sentiment is quite bearish in KR's options arena

Josh Selway
Aug 30, 2017 at 9:19 AM
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Analysts are weighing in on burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG), drug stock Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), and grocery name Kroger Co (NYSE:KR). Here's a quick roundup of today's bearish brokerage notes on shares of CMG, TEVA, and KR.

Telsey Slashes Price Target on CMG Stock

Chipotle stock has fallen off a cliff since peaking at $499 on May 16, closing yesterday at $310.37. In response, Telsey Advisory lowered its price target to $370 from $420. This is lower than the shares' average 12-month price target, which stands at $386.48. Meanwhile, short sellers continue to flock to CMG. Short interest exploded by more than 39% in the last two reporting periods, and now accounts for roughly 19% of Chipotle's float. 

Another Bear Note for Teva Pharmaceutical 

Teva Pharmaceutical stock has become a regular in our downgrades blog, as the shares continue to nosedive, yesterday hitting a fresh 15-year low of $15.45, before settling at $15.77. Over the past 12 months, TEVA has shed almost 70%. Now, the equity will need to overcome a price-target cut to $21 from $28 at Goldman Sachs. This fits the general opinion on the Street, where just two of 18 brokerages recommend buying the stock. However, with a 14-day Relative Strength Index (RSI) of just 15 -- deep in oversold territory -- Teva is due for a bounce on the charts, which may explain why it's up 1% before the open. 

Options Traders Expect More Losses for Kroger Stock

Kroger shares have also had a dreadful year, giving back more than one-third of their value to trade at $21.81, with their 50-day moving average quickly thwarting their most recent breakout attempt. Meanwhile, Jefferies just trimmed its price target to $24 from $25. 

Options traders have also been bearish. KR stock has a 10-day put/call volume ratio of 1.55 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ranking just 14 percentage points from an annual high. This means there's been a stronger-than-usual appetite for long puts over calls. 


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