BMY stock has found a familiar foothold atop its 80-day trendline
Analysts are weighing in on drug stocks Bristol-Myers Squibb Co (NYSE:BMY), Merck & Co., Inc. (NYSE:MRK), and Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bearish brokerage notes on shares of BMY, MRK, and VRX.
Jefferies Lowers BMY Stock Price Target
Jefferies cut its price target on Bristol-Myers Squibb stock to $68, though this still sits above the equity's Oct. 13 annual high. After notching that notable milestone, though, the shares pulled back to their 80-day moving average -- a trendline that's served as both support and resistance in the last 12 months, and is currently perched near BMY's early September bull gap lows. This time around, it's creating a floor for BMY shares, which were last seen trading up 0.2% at $61.07, bringing their year-to-date lead closer to 5%.
Options traders, however, have been betting on a bigger retreat in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 1.11 ranks higher than 94% of all comparable readings taken in the past year, meaning puts have been bought to open over calls at a faster-than-usual clip.
Merck Stock Brushes Off Bearish Brokerage Note
Jefferies also lowered its price target on MRK -- to $53. This represents a discount to last night's close; however, the stock is up 0.3% this morning at $54.97, after the drugmaker announced a strategic research collaboration with T-cell specialist Cue Biopharma.
This negative outlook isn't too surprising, though, given Merck stock's recent technical struggles. After bumping into familiar resistance near $66.40 in mid-September, the shares have plunged 17.5% -- due to back-to-back Keytruda-related bear gaps last month -- and hit a 12-month low of $54.41 yesterday. As such, the Dow stock's 14-day Relative Strength Index (RSI) closed Wednesday at 24, well into oversold territory, which may explain today's pop.
Valeant Pharmaceuticals Swings Lower on PT Cut
Valeant Pharmaceuticals stock has swung 1.3% lower to trade at $14.26, after Deutsche Bank cut its price target on the shares to $18 from $19. Despite a recent earnings-induced bull gap, the equity is staring at a nearly 19% year-over-year deficit, and there's plenty of room for more bearish brokerage notes to come down the pike -- and spark potentially volatile price action. Of the 13 analysts covering the shares, four still maintain a "strong buy" rating. Plus, the average 12-month price target of $16.06 stands well above VRX stock's current trading levels.