CMG, NKE, VRX Stocks Downgraded Today – Schaeffers Research (blog)

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Analysts are weighing in on fast-casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG), blue-chip athletic retailer Nike Inc (NYSE:NKE), and drug stock Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here’s a quick roundup of today’s bearish brokerage notes on shares of CMG, NKE, and VRX.

CMG Stock Lower After Guidance, Price-Target Cut

Late yesterday, Chipotle Mexican Grill said it expects second-quarter operating costs to be at or slightly higher than the previous quarter, due to higher promotion and marketing costs. In response, Instinet lowered its price target to $480 from $510. CMG stock has shed 5.75% to trade at $432.52, putting them on pace for their lowest close since March 29, and their first below the 100-day moving average since March 20.

Meanwhile, it’s not a bad time to pick up options on Chipotle. This is according to the stock’s Schaeffer’s Volatility Index (SVI) of 25%, which ranks in the low 18th annual percentile. In other words, low volatility expectations are being priced into near-term options. 

Nike Stock Lower Once Again

While the Dow settled last week in the black, Nike stock ended in the red, gapping lower after the firm announced job cuts. Now, Cowen is lowering its price target to $53 from $54. NKE shares are down another 0.8% today at $51.71, putting them just above their year-to-date breakeven level. Wall Street is split on Nike stock. By the numbers, 14 brokerages have “strong buy” opinions, and 14 others have “hold” or “sell” ratings. 

VRX Stock Taking On 160-Day Moving Average

Valeant Pharmaceuticals stock edged higher yesterday, as traders celebrated a new board member. Late yesterday, the company also announced that Arthur Shannon will serve as senior vice president and head of investor relations. Still, Mizuho Securities reiterated its “underperform” rating and $8 price target on VRX stock (subscription required). Valeant was last seen 2% lower at $13.18, as it remains well below its 52-week high of $32.75 from August 24. More recently, the shares have struggled to overcome their 160-day moving average. Options traders are certainly bullish. VRX has a 10-day call/put volume ratio of 3.50 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which tops 96% of readings from the past year. 

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