Equifax CEO Bows Out Before Testimony; PTCT Tanks After FDA Review

PTC Therapeutics failed to provide "persuasive" data on its DMD drug

Sep 26, 2017 at 3:31 PM
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U.S. stocks are trading cautiously higher this afternoon, as the Dow attempts to bounce back from a three-day losing streak. Among the names in the spotlight today are beleaguered credit agency Equifax Inc. (NYSE:EFX), apparel retailer L Brands Inc (NYSE:LB), and biopharmaceutical company PTC Therapeutics, Inc. (NASDAQ:PTCT). Here's a quick look at what is moving shares of EFX, LB, and PTCT.

Equifax CEO 'Retires' In Thick of Security Breach Investigation

Equifax stock is down 1.7% to trade at $103.32, on news that CEO Richard Smith is retiring less than three weeks after the company's massive data breach. Smith, however, is still scheduled to testify before a U.S. House panel on Oct. 3, and before the Senate Banking Committee the following day.

Since the breach was made public on Sept. 8, Equifax stock dropped as much as 37.2% to hit a two-year low of $89.59 on Sept. 14. Although EFX shares have since climbed back atop the century mark, the credit stock is pacing for its first close below its 20-month moving average in six years. Still, 10 of the 14 analysts recommend buying the stock, with not a single "sell" rating in sight. An extended downtrend, or an unfavorable Smith performance on Capitol Hill, could spark downgrades.

L Brands Scores Upgrade Ahead of Historically Bullish 4Q

Moving in the opposite direction today is L Brands stock, last seen trading 4.6% higher at $42.78, thanks to an upgrade to "overweight" from "neutral" from Atlantic Equities. Today's jump ranks L Brands stock among the best on the New York Stock Exchange (NYSE) and the S&P 500 Index (SPX). Although down 35.2% year-to-date, the retail stock tends to outperform in the fourth quarter, averaging a gain of nearly 10% over the past 10 years, according to recent data from Schaeffer's Senior Quantitative Analyst Rocky White.

LB stock has been stair-stepping lower since late 2015, and touched a six-year low of $35 on Aug. 17. However, the shares are now pacing for their second consecutive close above their 50-day moving average.

Options traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have upped the bullish ante of late. LB stock sports a 10-day call/put volume ratio of 1.84 -- good enough to rank in the 84th annual percentile.

FDA Not Persuaded By PTC Therapeutics' DMD Drug

Options traders on the major indexes have not been as bullish toward PTC Therapeutics stock, which was trading 16.2% lower at $16.35, at last check. The biotech stock is down after a U.S. Food and Drug Administration (FDA) review indicated the company failed to provide "persuasive" data to establish effectiveness for its Duchenne muscular dystrophy (DMD) drug, Translarna.

Although still up 50.6% year-to-date, today's plunge ranks PTCT as the second worst on the Nasdaq today, behind only fellow biotech Axovant Sciences stock, which tanked after its Alzheimer's drug failed a late-stage study. PTCT shares are now poised for just their second close below their 80-day moving average since May, and are testing their 200-day moving average.

There are likely plenty of recent options buyers cheering today. PTCT stock sports a 10-day put/call volume ratio of 1.97 -- in the 83rd percentile of its annual range. Analysts aren't sold on the biotech stock either, with all six rating it a lukewarm "hold."

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