Analyst Downgrades: Twitter Inc, Mylan NV, and Nike Inc

Analysts downwardly revised their ratings and price targets on Twitter Inc (TWTR), Mylan NV (MYL), and Nike Inc (NKE)

Karee Venema

Sep 23, 2016 at 9:52 AM

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Analysts are weighing in on microblogging name Twitter Inc (NYSE:TWTR), EpiPen parent Mylan NV (NASDAQ:MYL), and Dow stock Nike Inc (NYSE:NKE). Here's a quick roundup of today's bearish brokerage notes on TWTR, MYL, and NKE.

TWTR has soared nearly 20% to trade at $22.35, as takeover chatter overshadows a downgrade to "underperform" from "sector perform" and price-target cut to $14 from $17 at RBC -- with the brokerage firm citing "waning" interest from advertisers. Nevertheless, the shares have jumped through previous resistance in the $20-$21 range, after CNBC reported a buyout bid may be on the immediate horizon for Twitter Inc, with Alphabet Inc (NASDAQ:GOOGL) and salesforce.com, inc. (NYSE:CRM) on the short list of possible suitors. Today's bull gap could have short sellers rushing to cover. Although short interest declined 11.5% in the most recent reporting period, it still accounts for a healthy 8.7% of TWTR's available float.

Deutsche Bank lowered its price target on MYL to $58 from $60, although this still represents expected upside of 36% to the stock's current price at $42.59. Technically, the shares have plunged 15.5% since their most recent high of $50.40 in early August, amid a price-gouging scandal. However, MYL stock has been fighting back in recent sessions, as traders largely brushed off CEO Heather Bresch's testimony on Capitol Hill. On the sentiment front, short-term options traders are more call-skewed than usual. Mylan NV's Schaeffer's put/call open interest ratio (SOIR) of 0.56 ranks lower than 87% of all comparable readings taken in the past year.

NKE is down 0.6% at $55.09, after Canaccord Genuity cut its price target on the stock to $52. from $56. While the brokerage firm said Nike Inc's fiscal first-quarter earnings will likely beat expectations next Tuesday night, it believes a number of factors -- including increasing competition from adidas and Under Armour Inc (NYSE:UA) -- will negatively impact future orders. As such, it also lowered its full-year earnings forecast for NKE.

While the majority of analysts maintain a "strong buy" rating on the shares, a number of brokerage firms have been changing their tune as the stock widens its 12% year-to-date deficit. Options traders have shown a bias toward long puts over calls, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE's 10-day put/call volume ratio of 1.30 ranks in the 82nd annual percentile.

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