Tiffany Stock Pivots Higher Despite Weak Holiday Sales

NLS is at the bottom of the NYSE after a dismal earnings miss

Managing Editor
Jan 18, 2019 at 2:09 PM
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Stocks are cruising into the long weekend on U.S-China trade talk optimism. Luxury retailer Tiffany & Co. (NYSE:TIF) is higher, while Bowflex parent Nautilus, Inc. (NYSE:NLS) and broadband network solutions provider Casa Systems Inc (NASDAQ:CASA) are sharply lower. Below, we'll take a look at what's moving the shares of TIF, NLS, and CASA.

TIF Heading Toward Fourth Straight Weekly Win

This morning, Tiffany & Co reported a 2% drop in same-store sales for the holiday quarter. TIF fell to $87 at its session lows, but the stock has since pivoted higher to trade up 5.4% at $89.90, as Wall Street may have already priced in the subpar sales figures. However, Credit Suisse did cut its price target to $108 from $120. The shares are about to lock up their fourth straight weekly win, and are on track to topple their 40-day moving average for the first time since early October.

For a stock that's shed 34% in the last six months, its no surprise that puts are heavily favored. Put buying has more than doubled call buying in the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), and TIF's 10-day put/call volume ratio of 2.20 ranks in the 87th percentile of its annual range. In other words, near-term speculators are more put-heavy than normal.

Dismal Earnings Prompting NLS' Worst Day Ever

At the bottom of the New York Stock Exchange (NYSE) today is Nautilus, down 37.6% to trade at $7.36, after the company's fourth-quarter earnings and revenue handily fell short of analyst expectations. In response, D.A. Davidson downgraded the fitness stock to "neutral" from "buy," while halving its price target to $9 from $18, and another downgrade to "neutral" came from B. Riley. Craig-Hallum and Berenberg chimed in with cuts of their own, to $12, and $6, respectively. Nautilus stock earlier traded at a five-year low of $6.77, and is easily on track for its worst day ever.

More downgrades and/or price-target cuts could be on the way, as five of eight analysts in coverage of NLS rate it a "strong buy." What's more, the stock's consensus 12-month price target of $10.70 is still a 45% premium to its current perch.

CASA in Nasdaq Cellar After Weak Q4 Guidance

Casa Systems stock is down 22.2% to trade at $11.19, and earlier fell to a record low of $10.50. Triggering this collapse was a lower-than-expected fourth-quarter revenue forecast, which the company attributed to lower spending and certification delays. In response, Stifel downgraded CASA to "hold" from "buy" and trimmed its price target to $14 from $18. Not to be left out, Morgan Stanley downgraded the stock to "equal-weight" from "overweight" and sliced its price target to $11 from $18. CASA is near the bottom of the Nasdaq today, and on track for one of its worst days ever.

Analysts may have to shift their sentiment. Of the eight brokerages in coverage of CASA, seven rate it a "buy" or better, with zero "sells" on the books. 

 

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