Chipotle Mexican Grill, Inc. (NYSE: CMG) had to play the great give-back initially after earnings but shares picked back up on the gains and recovered more than $20 off the lows. Credit Suisse downgraded the growth food chain to Neutral on valuation, but the stock was reiterated as Buy with a $480 target at Argus.
Demandware, Inc. (NYSE: DWRE) saw its quiet period end on Tuesday and we saw the following initiations: Started as Buy at Deutsche Bank; Started as Outperform at William Blair; Started as Outperform at Oppenheimer; Started as Neutral at Goldman Sachs.
Hess Corporation (NYSE: HES) took it right on the chin after missing its earnings estimate and we saw at least three downgrades from analysts on Thursday: Cut to Neutral at JPMorgan; Cut to Equal-weight at Barclays; and Cut to Neutral at Credit Suisse.
Infosys Ltd. (NASDAQ: INFY) showed a cautious earnings report with slowing growth in the last couple of weeks, but one analyst went against the grain based upon a cheap valuation. The Indian IT-outsourcing giant was Raised to Buy at Citigroup on Thursday. Prior rating cuts and estimates cuts around the earnings concern had come from Credit Suisse, Barclays, Macquarie, Deutsche Bank, and Goldman Sachs. Citi is trying to stand out here.
McDonald’s Corporation (NYSE: MCD) is supposed to be the darling but we have seen more caution creep in as the shares look properly valued and as the growth story has been massive. The stock was downgraded to Hold from Buy by Argus on valuation.
SanDisk Corporation (NASDAQ: SNDK) had already warned ahead of earnings and then it warned for the quarter ahead with its formal earnings report. This has fallen from almost $50 to $36 during the cycle. On Friday came an against the gain call from Jefferies, which raised its rating to Buy from Hold on Friday based upon an oversold valuation trough. This came on the heels of multiple analyst downgrades the week before.
Wal-Mart Stores Inc. (NYSE: WMT) was an awful stock this last week due to the Mexico bribery news, but the stock did recover at the end of the week after it appointed a new corruption oversight member. It was shocking at how few analyst downgrades there were, but Argus stood out with a mid-week downgrade to Hold from Buy based on the concerns.
Zynga, Inc. (NASDAQ: ZNGA) was lower on Friday after earnings as the valuations are a concern and as the guidance was not full of any great upside and since the guidance came with the admission that the year will be back-end loaded. The social gaming player was raised to Neutral at Bank of America Merrill Lynch and was raised to Overweight at J.P. Morgan.
We already called this one out about chasing the results higher and higher because the news should have been known. Both Seagate Technology PLC (NASDAQ: STX) and Western Digital Corporation (NYSE: WDC) were downgraded to Neutral from Buy at Bank of America Merrill Lynch on Friday based on much of the same thoughts.
Goldman Sachs made a rather interesting call on Spanish banks this last Monday, particularly if you consider that S&P downgraded Spain on Thursday. The brokerage firm made a change to its Conviction Buy List: Banco Santander (NYSE: STD) was added to the Conviction Buy List while Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) was maintained as Buy but removed from the prized list. Banco Santander was also raised to ‘Overweight’ at J.P. Morgan on Monday.
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JON C. OGG