BofA-Merrill Lynch thinks Microchip Technology stock is overloved by analysts
Sinking FAANG stocks are pressuring the broader equities market today -- putting the S&P 500 Index (SPX) on track to snap its five-day win streak. Among individual names making notable moves are semiconductor stock Microchip Technology Inc. (NASDAQ:MCHP), Botox rival Revance Therapeutics Inc (NASDAQ:RVNC), and sensor specialist Sensata Technologies Holding PLC (NYSE:ST). Here's a quick look at what's impacting shares of MCHP, RVNC, and ST.
Microchip Technology Stock at Risk for More Bear Notes
BofA-Merrill Lynch downgraded Microchip Technology stock to "neutral" from "buy," and slashed its price target to $95 from $115. The brokerage firm is concerned about the company's high debt and Microsemi purchase, and said, "with 95% buy ratings (highest in semis), MCHP is already well appreciated by the Street."
More specifically, 13 of 14 analysts maintain a "buy" or better rating on MCHP stock, while the average 12-month price target of $113.31 is a 38.3% premium to current trading levels. This puts the security at risk of more bearish brokerage notes, especially given it's recent struggles on the charts. The equity is stuck trading beneath its Aug. 10 bear-gap lows -- which are currently home to its 20-day moving average -- last seen down 2% at $81.91.
Revance Therapeutics Shorts Sidelined Today
Revance Therapeutics stock has plunged 7.9% to trade at $23.65, pacing for a fifth straight loss. Pressuring the shares is a downgrade to "market perform" from "market outperform" at JMP Securities.
This negative price action is just more of the same for the stock, which is down 34.1% year-to-date. Plus, RVNC stock hit an annual low of $22.25 on Sept. 14, after rival Allergan (AGN) said it scooped up Bonti, a privately held firm that makes a faster-acting version of Botox.
Short sellers have certainly been in the drivers' seat, too. Despite being short-sale restricted today, there are currently 2.66 million Revance Therapeutics shares sold short. This represents a healthy 8.6% of the stock's float, or 13.2 times the average daily pace of trading.
Morgan Stanley Sets Street-Low PT for Sensata Technologies
Sensata Technologies stock was downgraded to "underweight" from "equal weight" at Morgan Stanley, with the brokerage firm cutting its price target to $47 from $55 -- the lowest on Wall Street. ST shares were last seen down 5.5% at $49.83, headed toward their worst one-day loss since June 27, 2016.
While the shares are now in the red on a year-to-date basis, the selling appears to be stalling near $50. What's more, this round level is home to ST's 320-day moving average, which contained a late-June/early July pullback.
Today's downside has sparked accelerated activity in ST's typically quiet options pits. With about 75 minutes left in the trading session, 754 puts and 573 calls are on the tape -- more than seven times the expected intraday amount. Traders may be buying to open new positions at the September 50 put, betting on bigger losses through expiration at the close this Friday, Sept. 20.