3 Stocks Spiraling After Downgrades

Both J. Jill and Juniper Networks warned of disappointing third-quarter earnings results

Oct 12, 2017 at 9:30 AM
facebook twitter linkedin

Analysts are weighing in on retail stock J.Jill Inc (NYSE:JILL), network equipment specialist Juniper Networks, Inc. (NYSE:JNPR), and prepaid card name Blackhawk Network Holdings Inc (NASDAQ:HAWK). Here's a quick roundup of today's bearish brokerage notes on shares of JILL, JNPR, and HAWK.

J. Jill Stock Spirals After Slashed Guidance, Downgrade

JILL stock is bracing for a 45% drop out of the gate -- set to open at a new record low -- after the women's retailer slashed its third-quarter profit and same-store sales forecast, citing lower-than-expected sales. In reaction, SunTrust Robinson cut its rating on the retailer to "hold" from "buy," while Deutsche Bank and Jefferies cut their respective price targets to $11 and $13.

Since its March 9 open at $12.75 -- below the retailer's $13 per share initial public offering -- J. Jill stock has declined 22.1%, settling Wednesday at $9.93. More bearish brokerage notes are likely on the way, considering seven of eight analysts maintained a "buy" or better rating on the stock at last night's close.

Juniper Networks Downgraded After Profit, Revenue Warning

JNPR shares are down 4.5% in pre-market trading, after the company's lower-than-expected preliminary third-quarter earnings report was met with a downgrade to "neutral" from "buy" at Nomura Instinet and price-target cuts at BMO (to $31) and Raymond James (to $34).

After closing last night at $26.86, today's drop could have the shares trading near levels not seen since January, and options traders are likely cheering. Juniper Network stock's 10-day put/call volume ratio of 13.35 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 99% of all comparable readings, pointing to an unusual preference for bearish bets over bullish of late

Revenue Miss, Downgrade Sink HAWK Stock

Blackhawk Network reported an adjusted third-quarter profit of $0.18 per share that came in above the consensus estimate, but the company's $419.3 million in revenue missed the mark, and it lowered its full year operating revenue forecast. Against this backdrop, HAWK is down nearly 13% ahead of the bell, with a downgrade to "market perform" from "outperform" at Raymond James and price-target cuts from SunTrust Robinson (to $43) and Craig-Hallum (to $50) pouring salt on the proverbial wound.

Heading into today's trading, the stock was up 17.3% year-to-date at $44.20, with its 120-day moving average providing steady support since last October. Amid this positive price action, short sellers have been jumping ship, too. Short interest on HAWK fell 13% in the most recent reporting period to 3.36 million shares. However, this still accounts for a relatively healthy 6.4% of the stock's available float.

Begin the New Year With Schaeffer's 7 FREE 2022 Stock Picks!



Special Offers from Schaeffer's Trading Partners