Genocea Stock Halved; JPMorgan Chase Gets Downgraded

Cheesecake Factory could struggle to compete with the food delivery sector, according to one brokerage firm

Managing Editor
Sep 26, 2017 at 10:17 AM
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Analysts are weighing in on bank stock JPMorgan Chase & Co. (NYSE:JPM), restaurant chain Cheesecake Factory Inc (NASDAQ:CAKE), and biotech Genocea Biosciences Inc (NASDAQ:GNCA). Here's a quick roundup of today's bearish brokerage notes on shares of JPM, CAKE, and GNCA.

Deutsche Bank Downgrades JPMorgan Chase

Deutsche Bank downgraded JPMorgan Chase to "hold" from "buy," saying the Fed's plan to gradually raise interest rates may not boost bank stocks, and that "increased competition in investment banking/trading may erode some of JPM's recent gains." Nevertheless, the brokerage firm raised its price target to $96 from $90 -- though this sits just a hair above the equity's current perch -- while Instinet raised its JPM target price to $87 from $86.

At last check, JPM stock was down 0.3% to trade at $93.83, but it has added nearly 43% year-over-year, and last Thursday touched a new record high of $95.37. Analyst sentiment remains split, though. At last night's close, nine of the 17 brokerages covering JPM rated the stock a "hold," while the other eight said it was a "strong buy."

Store Traffic Concerns Spark Cheesecake Factory Stock Downgrade

CAKE is down 1.9% to trade at $40.81, after Wedbush downgraded it to "neutral" from "outperform," and slashed its price target from $44 to $52. The brokerage firm cited concerns over declining store traffic and growth in the food delivery sector as reasons for the downgrade.

Today's price action is just more of the same, considering CAKE stock has shed 40% since topping out at a record high of $67.14 in early May -- with its 30-day moving average provide stiff resistance since May. Plus, the equity touched a four-year low of $38.34 on Sept. 7. 

Some of this downside is likely a result of increased selling pressure from shorts. Short interest is up 17.4% from the May 1 reporting period to 9.84 million shares -- 23.25% of the stock's available float.

Genocea Stock Gutted After Layoffs, Drug Halt

Genocea Biosciences stock is down a whopping 65.5% to trade at $1.84, earlier hitting a new record low of $1.64, after the drug developer reduced its staff by 40%, and halted progress on its genital herpes treatment GEN-003, which was in late-stage clinical trials. As a result, Stifel downgraded GNCA to a "hold" from "buy," while reducing its price target to $2.50 from $15. Cowen and Company also issued a price-target cut, to $10 from $40.

While GNCA is currently short-sale restricted, short sellers have flocked to GNCA. Short interest increased by 8% during the last two reporting periods to 4.62 million shares. These bearish bets are at their highest point since June 2016, and represent a whopping one-fifth of GNCA's total available float.

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