2 Stocks Reeling After Earnings

Wingstop's impressive YTD advance is spooking Guggenheim

Nov 29, 2017 at 10:04 AM
facebook twitter linkedin

Analysts are weighing in aircraft equipment maker Wesco Aircraft Holdings Inc (NYSE:WAIR), quick service restaurant name Wingstop Inc (NASDAQ:WING), and tech stock Autodesk, Inc. (NASDAQ:ADSK). Here's a quick roundup of today's bearish brokerage notes on shares of WAIR, WING, and ADSK.

Wesco Aircraft Holdings Stock Hits New Lows After Earnings

Deutsche Bank cut its price target on Wesco Aircraft Holdings stock to $7.50 from $8.00, after the company reported a fiscal fourth-quarter earnings miss. In reaction, WAIR shares have plunged 13.6% to trade at $6.65, earlier hitting a record low of $6.05. The stock has been plagued by a series of negative earnings reactions in recent quarters, and is now down 55.9% year-to-date. As such, more price-target cuts could be on the horizon, considering the current 12-month price target for WAIR stock sits at a lofty $9.50.

Wingstop Stock Downgraded on Valuation Concerns

Wingstop is down 4.4% to trade at $38.11, after the stock saw its rating lowered to "neutral" from "buy" at Guggenheim, which cited valuation concerns and uncertainty over an impending change in how the chicken wing maker recognizes revenue. This follows the equity's nearly 35% year-to-date rise, based on last night's close, with WING shares fresh off a Nov. 14 record high of $40.51.

Part of the recent rise was likely at the hands of short sellers, who have been covering their bearish positions in droves. Since topping out at a record high 10.02 million shares in early September, short interest is down 16.6%. Nevertheless, the remaining shorted shares still account for 29.38% of WING stock's float, and would take almost two weeks to cover, at the average pace of trading.

Restructuring Plans, Revenue Outlook Level Autodesk Stock

Autodesk stock has plunged 13% to trade at $113.20, as news the AutoCAD parent will layoff 13% of its workforce as part of a larger restructuring plan overshadows a slimmer-than-expected third-quarter loss. The company also offered up weak fourth-quarter revenue guidance. Analysts were quick to chime in, too, with Wedbush downgrading ADSK stock to "neutral" from "outperform" and joining at least three other brokerages in trimming their respective price targets.

Today's negative price action marks a change of pace for ADSK shares, which were up almost 76% year-to-date at last night's close, and tagged a record high of $131.10 just yesterday. Nevertheless, bearish options trading was picking up on the stock ahead of earnings. This growing skepticism is seen elsewhere on Wall Street, too, with short interest up 28% in the most recent reporting period.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners