The Cruise Stock Hit With a Rare Downgrade

GE stock was hit with downgrades one day after its worst selloff in eight years

Nov 14, 2017 at 10:10 AM
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Analysts are weighing in on embattled Dow stock General Electric Company (NYSE:GE), cancer treatment specialist BeiGene Ltd (NASDAQ:BGNE), and cruise operator Royal Caribbean Cruises Ltd (NYSE:RCL). Here's a quick roundup of today's bearish brokerage notes on GE, BGNE, RCL stocks.

GE Stock Slapped With Downgrades

In the wake of General Electric's worst one-day percentage drop since 2009, Independent Research lowered its rating to "hold" from "buy" and its price target to $21 from $29. RBC followed suit with a downgrade to "sector perform" from "outperform" -- saying there are "few reasons to believe the stock bottoms here" -- and cut its GE target price alongside Citigroup.

In reaction, GE stock is down 1.6% today at $18.71, bringing its year-to-date loss to nearly 41%. More bearish brokerage notes are likely for the equity that hit a five-year low of $18.54 out of the gate. At last night's close, six analysts still maintained a "buy" or better rating, while the average 12-month price target stood at a lofty $24.27.

Baird Issues Post-Earnings Downgrade for BeiGene

BeiGene stock received mixed messages from analysts after the biotech reported third-quarter earnings last night and said it's initiating a trial for a pair of its lymphoma treatments. While Baird cut its rating to "neutral," the brokerage firm boosted its price target to $83 from $58. William Blair also raised its BGNE price target, to $94 from $82.

At last check, BGNE is down 3.4% at $80.36, extending the stock's retreat from its Oct. 10 record high of $118.95. This recent pullback has had the security testing its 80-day moving average -- currently located at $82.15 -- a trendline that's served as support for most of the year.

Part of this selloff is possibly due to a steady stream of pressure from shorts. Despite pulling back slightly from record-high levels in the most recent reporting period, 1.81 million BGNE shares are still sold short, or 13.09% of the stock's available float.

Berenberg Cuts RCL Stock Rating on Rising Fuel Costs

Royal Caribbean Cruises shares are down 1.7% to trade at $122.38, after Berenberg cut its rating to "hold" from "buy," citing higher fuel costs as one of the catalysts for the downgrade. Today's negative price action runs counter to RCL's longer-term trend, with the shares up 50% year-to-date, and fresh off a Nov. 7 post-earnings record high of $133.75. What's more, the stock's rising 80-day moving average has served as a steady layer of support during recent pullbacks.

Not surprisingly, then, today's downgrade is rare for Royal Caribbean Cruises. As of last night, 12 of 15 brokerages maintained a "strong buy" rating on the shares, with not a single "sell" on the books. Echoing this upbeat outlook, the average 12-month price target of $138.44 sits in uncharted territory.


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