Analyst Downgrades: Netflix, Inc., Potash Corporation of Saskatchewan, and Illumina, Inc.

Analysts downwardly revised their ratings and price targets on Netflix, Inc. (NASDAQ:NFLX), Potash Corporation of Saskatchewan (USA) (NYSE:POT), and Illumina, Inc. (NASDAQ:ILMN)

Josh Selway

Apr 19, 2016 at 9:14 AM

Analysts are weighing in on streaming video provider Netflix, Inc. (NASDAQ:NFLX), fertilizer firm Potash Corporation of Saskatchewan (USA) (NYSE:POT), and genetic analysis stock Illumina, Inc. (NASDAQ:ILMN). Here's a quick roundup of today's bearish brokerage notes on NFLX, POT, and ILMN.

NFLX is off 8.5% ahead of the open after the company's first-quarter earnings release. While quarterly profit beat forecasts and revenue met expectations, Netflix, Inc.'s current-quarter subscriber growth outlook disappointed. NFLX has added close to 34% in the past 12 months to trade at $108.40, but is now set to open back below the century level. This potential price action is likely to disappoint bullish options traders. Making matters worse, analysts are trimming their expectations in a hurry. No fewer than seven brokerage firms cut their price targets on NFLX this morning, though the lowest of which -- from Baird -- came in at just $108.

POT is so far unchanged in electronic trading, despite a bearish note from Barclays. The brokerage firm dropped the stock's rating to "underweight" from "equal weight," while reducing its price target to $14 from $16. The shares have been moving steadily lower for the past year, hitting a nine-year low of $14.64 in January, and closing Monday at $16.76. Most other analysts share Barclays' grim outlook. Specifically, 13 of 18 covering analysts call Potash Corporation of Saskatchewan (USA) a "hold" or worse.

ILMN is getting crushed in pre-market trading, down 19.2%, after the company's preliminary first-quarter revenue results came in well below the Street's expectations. At $178.13, Illumina, Inc. is a far cry from its all-time high of $242.37, seen last July, but the stock just yesterday managed its first close atop its 200-day moving average this year. Regardless, BofA-Merrill Lynch cut its rating on ILMN to "neutral" this morning, while Goldman Sachs, Barclays, Cowen, and Leerink all lowered their price targets. The pending sell-off should benefit options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), however. The stock's 10-day put/call volume ratio across these exchanges sits at 1.26, in the 69th percentile of its annual range.

Sign up now for Schaeffer's Opening View newsletter to get a head start on all the major pre-market news!

Follow @Schaeffers

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!