2 Stocks Sinking on Dismal Earnings; Plus, Abercrombie's Downgrade

DDD hit an annual low after the company's earnings miss and withdrawn outlook

Nov 1, 2017 at 10:04 AM
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Analysts are weighing in on apparel retailer Abercrombie & Fitch Co. (NYSE:ANF), three-dimensional printing company 3D Systems Corporation (NYSE:DDD), and video game maker Electronic Arts Inc. (NASDAQ:EA). Here's a quick roundup of today's bearish brokerage notes on ANF, DDD, and EA.

Abercrombie & Fitch Stock Drops on Downgrade

Abercrombie & Fitch stock is down 7.3% to trade at $12.45, after J.P. Morgan Securities downgraded ANF to "underweight" from "neutral," and cut its price target to $10 from $12.The brokerage firm said that, "With six years of negative same-store sales and market share loss coinciding with an improving consumer backdrop, we are increasingly concerned with ANF's competitive positioning."

Since sinking to a 17-year low of $8.81 on abandoned buyout plans in July, the security has climbed roughly 41% to trade back above its 200-day moving average. Nevertheless, the majority of analysts remain bearish toward the equity. Of the 14 brokerage firms following ANF stock, 12 rate it a "hold" or worse.   

Analyst Halves Price Target After 3D Systems Withdraws Outlook

Another stock taking a nosedive this morning is 3D Systems, last seen down 28% at $8.90, and earlier hit an annual low of $8.84, after the printing company reported a surprise third-quarter loss. In addition, 3D Systems withdrew its full-year outlook. As a result, BofA-Merrill Lynch downgraded the stock to "underperform" from "buy," and halved its price target to $10 from $20, joining at least four other brokerage firms in lowering their respective price targets.

DDD shares have been on a steady decline since hitting a two-year high of $23.70 on May 17, and short sellers are likely cheering today's plunge, though the stock is on the short-sale restricted (SSR) list. Short interest grew 7.3% during the two most recent reporting periods, to 28.86 million shares, which represents more than a quarter of the stock's total available float.

EA Dips on Disappointing Holiday Forecast

Shares of Electronic Arts are also moving lower this morning, last seen down 5% to trade at $113.54, after the video game maker's holiday-quarter revenue forecast narrowly missed estimates. As such, Barclays cut its price target to $127 from $129. The stock also received bullish analyst attention, however, from Jefferies, which upped its price target to $138 from $135 -- in uncharted territory.

Options traders seemed to have been betting on an earnings breakout from EA, too, as evidenced by its 10-day call/put volume ratio of 2.13 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- good enough to rank in the 75th annual percentile. In other words, options traders bought to open EA calls relative to puts at a faster-than-usual clip in recent weeks.

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