2 Stocks Sinking On Profit Warnings

SRPT stock is ready to add 15% today on positive trial results

Sep 6, 2017 at 9:30 AM
facebook twitter linkedin

U.S. stocks are signaling a bounce this morning, as investors shake off Hurricane Irma fears. Among specific stocks in focus are travel site Trivago NV - ADR (NASDAQ:TRVG), drug stock Sarepta Therapeutics Inc (NASDAQ:SRPT), and Sharpie parent Newell Brands Inc (NYSE:NWL). Here's a quick look at what's boosting shares of TRVG, SRPT, and NWL.

TRVG Shares Set for Another Bear Gap

Trivago stock is pacing for its second bear gap this year, with the shares down 25.3% in pre-market trading -- set to open at a new record low. This comes after the company issued a current-quarter and full-year profit warning. The security has struggled since peaking at $24.27 on July 19, closing yesterday at $14.93. Extended weakness could bring bearish notes from the analyst bunch. Specifically, half the brokerage firms tracking TRVG stock have handed out a "buy" or "strong buy" recommendation, with zero "sell" ratings on the books. 

Sarepta Therapeutics Stock Jumps on Upbeat DMD Drug Data

Sarepta Therapeutics' treatment for Duchenne muscular dystrophy (DMD), golodirsen, performed better than expected in a clinical trial, boosting the stock 14% in electronic trading. The shares experienced a dramatic rise last September, too, climbing as high as $63.73, but quickly erased those gains to trade below $27 by the end of 2016. The stock has been grinding higher since, closing yesterday at $41.08. 

In the options pits, traders have almost exclusively preferred calls over puts. For instance, SRPT stock has a 10-day call/put volume ratio of 27.75, which is only 1 percentage point from a 52-week high. This means speculators have been much more bullish than usual toward the stock. 

Ugly Outlook Sends Newell Brands Lower

Newell Brands slashed its full-year profit outlook, citing the effects of Hurricane Harvey, and the stock is now ready to open 3.5% lower. At $48.72, NWL shares were already facing resistance from their 200-day moving average, a trendline that blocked their breakout attempts earlier in the year. Overall, the equity has shed 9.1% over the past 12 months. 

Considering this weak price action, price-target cuts from analysts could come through in the near future. Newell Brands has an average 12-month price target of $58.80, which represents a 25% premium to where the stock is prepared to open trading today. 

Grab your FREE Eternal Contrarian report!


Special Offers from Schaeffer's Trading Partners