Constellation Stock Slammed After Rare Profit Miss

Dermira has made its way higher after receiving an FDA nod

Managing Editor
Jun 29, 2018 at 2:59 PM
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The Dow is trading significantly higher this afternoon, with blue chip Nike (NKE) taking the lead. Three stocks making noteworthy moves are drug concern Dermira Inc (NASDAQ:DERM), banking name Wells Fargo & Co (NYSE:WFC), and Corona parent Constellation Brands, Inc. (NYSE:STZ). Below, we will take a closer look at how shares of DERM, WFC, and STZ are trading on the charts.

DERM Stock Rises on FDA Approval

Shares of Dermira are 1.7% higher to trade at $8.93, after the company's topical cloth for excessive underarm perspiration was approved by the U.S. Food and Drug Administration (FDA). DERM has been moving sideways on the charts following its dramatic March 5 bear gap -- which resulted in an almost 65% one-day drop after the company abandoned its acne drug. Plus, the stock ran into familiar resistance near the $11 mark earlier and remains down 68% year-over-year.

Despite the stock's overall underperformance, analysts have been optimistic. Of the seven brokerage firms covering DERM, five sport "buy" or better recommendations. Further, the stock's average 12-month price target of $17.29 sits at an 88% premium to current levels, and Mizuho raised its price target to $10 from $9 earlier.

Wells Fargo Stock Gets a Boost After Stress Tests

Bank stocks are in focus after the results from the Fed's annual stress tests. Wells Fargo was given the green light to go ahead with its 2018 capital plan, which includes a boosted buyback program and dividiend payment. At last chance, WFC stock has jumped 4.1% to trade at $55.85. The shares could see even bigger moves over the next several weeks, with the financial firm set to report quarterly earnings ahead of the open on Friday, July 13.

Options traders appear to be betting on the price action to resolve to the upside. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the stock with a 10-day call/put volume ratio of 3.14, ranking in the 90th percentile of its annual range. This suggests that WFC calls have been bought over puts at a faster-than-usual clip during the past two weeks.

STZ Stock Has Found a Familiar Floor Today

Constellation Brands stock is down 4.7% at $221.30, after the drink maker reported a first-quarter profit miss -- its first quarterly earnings miss in at least two years, according to Thomson Reuters. Nevertheless, STZ found support at its 200-day moving average, which also cushioned a late-May retreat.

On the sentiment front, the equity's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.44, which ranks in the 29th percentile of its annual range. This low ranking shows that speculators targeting option contracts expiring within three months are unusually call-skewed at the moment. 

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