The Drug Stock Bearish Analysts Can't Get Enough Of

Teva Pharmaceutical has been in analysts' bearish crosshairs recently

Nov 17, 2017 at 10:12 AM
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Analysts are weighing in on retail stocks Williams-Sonoma, Inc. (NYSE:WSM) and Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH), as well as drugmaker Teva Pharmaceutical Industries Ltd (NYSE:TEVA). Here's a quick roundup of today's bearish brokerage notes on shares of WSM, SPWH, and TEVA.

Williams-Sonoma Stock Downgraded After Earnings

Williams-Sonoma stock is down 13.3% at $45.83, after the Pottery Barn parent offered up a disappointing fourth-quarter profit forecast and said it is buying augmented reality startup Outward for $112 million in cash. And while third-quarter results arrived in line with estimates, J.P. Morgan Securities downgraded the stock to "underweight" from "overweight," and joined Jefferies and Telsey Advisory in lowering their respective WSM price targets.

It's been a choppy year for the equity, which traded as high as $55.89 back in April and as low as $42.69 in late August. Today's drop has the shares back in negative year-to-date territory, though, and south of their 80-day moving average -- a trendline that's served as support since early September.

While WSM stock is on the short-sale restricted list today, there are plenty of bears cheering this post-earnings plunge. Short interest rose almost 6% in the latest reporting period to 18.79 million shares, or 25.66% of Williams-Sonoma's available float.

Sportsman's Warehouse Stock Sinks After Revenue, Forecast Miss

D.A. Davidson lowered its price target on Sportsman's Warehouse stock to $6.50 from $8 and Credit Suisse cut its target to $6 from $7, after the outdoor sporting goods retailer reported a third-quarter revenue miss, a 7% drop in same-store sales over the three-month period, and gave a dismal current-quarter forecast. Nevertheless, an adjusted profit beat has SPWH up 1.3% at $4.03.

This positive price action is rare for the security, which was down a whopping 57.6% year-to-date heading into today's trading. This downside is partly the result of intense selling pressure from shorts, with short interest more than doubling in 2017 -- and fresh off an Oct. 15 record high.

Mizuho Takes Aim at Embattled Teva Pharmaceutical Stock

Teva Pharmaceutical saw its price target dropped to $12 from $15 at Mizuho -- just the latest in a string of bearish brokerage notes for the drug stock. TEVA shares are brushing off this negative analyst note, though, up 2.5% to trade at $13.11. The equity remains down 63.9% year-to-date, however, and options traders have been betting on bigger losses. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TEVA's 10-day put/call volume ratio of 0.98 ranks in the 72nd annual percentile. In other words, puts have been bought to open relative to calls at a faster-than-usual clip.

 

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