The Dow Stock Downgraded on China Concerns

One day after Mazor Robotics stock hit a record high, Barclays lowered its rating on the healthcare name

Oct 19, 2017 at 9:48 AM
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Analysts are weighing in on Dow stock Nike Inc (NYSE:NKE), medical device maker Mazor Robotics Ltd (NASDAQ:MZOR), and fast-casual restaurant chain Chipotle Mexican Grill, Inc. (NASDAQ:CMG). Here's a quick roundup of today's bearish brokerage notes on shares of NKE, MZOR, and CMG.

Nike Inventory Glut Behind Goldman Sachs Downgrade

Nike stock is down 0.6% to trade at $52, after Goldman Sachs downgraded the athletic apparel name to "neutral" from "buy" -- citing near-term challenges, including an "inventory overhang" and a slowdown in China. Today's negative price action is just more of the same for NKE stock, which has shed 14% since topping out at an annual high of $60.53 in August -- and is not far from its Nov. 2 52-week low of $49.01.

Against this backdrop, NKE shares could be at risk of additional downgrades, considering 14 of 30 analysts still maintained a "buy" or better rating at last night's close. Looking ahead, Nike will host its annual investor day next Wednesday, Oct. 25.

Barclays Downgrades Mazor Robotics Stock

Barclays downgraded Mazor Robotics to "underweight" from "equal weight," with the brokerage firm saying it cannot justify the stock's valuation. Yesterday, MZOR shares topped out at a record high of $59.59, but today, they have plunged 8.1% to trade at $53.79.

Nevertheless, MZOR stock remains up 145% year-to-date. And while short sellers have been getting crushed, options traders have been taking the bullish route toward Mazor Robotics stock. The equity's top-heavy 10-day call/put volume ratio of 9.13 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 71st annual percentile, meaning calls have been bought to open over puts at a faster-than-usual clip.

More Bearish Brokerage Notes Hit Chipotle Stock

CMG shares are trading near breakeven this morning at $318.89, after receiving price-target cuts at Instinet (to $338) and Maxim Group (to $420). This follows BofA-Merrill Lynch's drastic target cut yesterday, when the brokerage firm also downgraded Chipotle stock.

The security has been sliding since hitting its May highs under pressure from its 50-day moving average. CMG recently retook this trendline after a bounce from its late-September four-year low south of $300, but could put it to the test again today.

And while most of the 28 analysts covering Chipotle Mexican Grill maintain a "hold" or worse rating, there's room for more price-target cuts to come down the pike. CMG's average 12-month price target is docked at $362.88, an almost 14% premium to current trading levels. Separately, Chipotle earnings are due after the market closes next Tuesday, Oct. 24.


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