A High-Profile Downgrade Sends This Gold Stock to New Lows

A recent round of short covering may have helped WDAY stock reach record highs

Karee Venema
Nov 30, 2017 at 10:15 AM
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Analysts are weighing in gold stock Barrick Gold Corp (NYSE:ABX), software developer Workday Inc (NASDAQ:WDAY), and burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of today's bearish brokerage notes on shares of ABX, WDAY, and CMG.

Barrick Gold Stock Downgraded to "Sell" at Citigroup

Barrick Gold stock is down 3.2% to trade at $13.59 -- fresh off a new annual low of $13.46 -- after Citigroup downgraded the miner to "sell" from "buy" and lowered its price target by $7 to $13. The brokerage firm said ABX is no longer a "turnaround story," and believes earnings growth for gold majors will face headwinds in the new year.

Today's negative price action is just more of the same for ABX stock, which is down more than 25% from its early September highs near $18.35. This recent downside has occurred alongside a sharp rise in short selling, with short interest up 20% in the most recent reporting period to 13.82 million shares.

Workday Stock Gets Mixed Post-Earnings Analyst Notes

Analysts have been quick to chime in on Workday, after the human resources software developer reported earnings last night. While three brokerages raised their price targets following stronger-than-expected third-quarter results, no fewer than three lowered their WDAY price targets post-earnings, including Jefferies to $101 from $106. Plus, Cowen expressed concern over the "lack of visibility into billings or annualized backlog."

In reaction, WDAY stock is down 1.8% at $104.63, but remains more than 58% higher on a year-to-date basis. In fact, the shares topped out at a record high of $116.89 on Monday. Any additional downside could be contained by the equity's 120-day moving average -- a rising trendline that's served as support since mid-January.

On the sentiment front, short sellers have been exiting their losing positions en masse -- which may have helped buoy WDAY to new highs. Short interest fell 16% in the two most recent reporting periods to 12.72 million shares. This still represents 11.6 times the stock's average pace of trading, though, meaning there's plenty of buying power still sitting on the sidelines.

William Blair Downgrades CMG Stock on CEO Uncertainty

William Blair downgraded Chipotle Mexican Grill stock to "market perform," saying the company's search for a new CEO to replace outgoing Steve Ells creates an added layer of uncertainty. Nevertheless, CMG shares are up 1.7% to trade at $307.27, extending yesterday's bull gap. But while the security is on track to close north of its 80-day moving average for the first time since June, it remains down 18.6% year-to-date. As such, most analysts are bearish on CMG stock, with 23 of 28 maintaining a "hold" or worse recommendation.


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