Tuesday Morning’s Market Insights: Fitbit Inc (FIT), Chipotle Mexican Grill, Inc. (CMG), Valeant Pharmaceuticals Intl Inc (VRX), Cabot Oil and Gas Corporation (COG)


Fitbit Inc (NYSE:FIT) is plunging 15% in pre-market trading following its Q4:2015 earnings release yesterday after market close. The company posted revenues of $712 million and earnings of $0.35 per share, surpassing analyst estimates of $648 million in revenue and earnings of $0.25 per share. However, Fitbit guided sales of $430 million and earnings of $0.01 for Q1, way below estimates of $0.23 per share and sales of $485 million. Fitbit’s CFO Bill Zerella attributed this miss due to higher sales and marketing expenses related to the Alta and Blaze launches in addition to higher manufacturing expenses.

After earnings, analyst Erinn Murphy weighed in on the stock, downgrading the company to Neutral from Overweight and slashing her price target to $14 from $24 as a result of weak Q1 guidance. She states, “While we were holding out for Q4’s report where we expected Q1 guidance to be better, this simply did not come to fruition. We were surprised to the downside of the Q1 “miss” and in this market environment, we struggle to recommend a stock where almost the entirety of FY16 earnings are weighted in the final three quarters. We recognize we have been wrong on our FIT call but at this juncture, find ourselves hard pressed to arrive at FY16 guidance.”

According to TipRanks’ statistics, out of the 12 analyst who have rated the stock in the past 3 months, 6 gave a Buy rating while 6 remain on the sidelines. The average 12-month price target for the stock is $25.89, marking a 53% upside from where shares last closed.

Chipotle Mexican Grill, Inc. (NYSE:CMG) is down over 2% in pre-market trading following a downgrade form Deutsche Bank analyst Karen Short, who gave a Sell rating from hold with a $400 price target. The analyst is not sure if the company’s new food safety and marketing initiatives will have a positive impact and return shares to levels before the E.coli scandal, and believes the current stock price already reflects the recovery.

She states, “We still question what a recovery will look like (and when it will materialize). While management has been proactive—putting in place new food safety prep and procedures (in its supply chain and unit-level), and new marketing and compensation programs to regain consistency and customer trust, there is tremendous uncertainty on how well they will be received.”

According to TipRanks’ statistics, out of the 27 analyst who have rated the stock in the past 3 months, 12 gave a Buy rating, 2 gave a Sell rating, and 13 remain on the sidelines. The average 12-month price target for the stock is $496.19, marking a 6% downside from where shares last closed.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is up close to 4% in pre-market trading after the company announced last night that it would delay the filing of its annual report due to $58 million in unrecognized sales to Philidor. As a result, the company is said to restate its 2014 and 2015 financial results, which will reduce the company’s 2014 earnings by 10 cents per share and will increase its 2015 results by 9 cents per share.

According to TipRanks’ statistics, out of the 17 analysts who have rated the company in the past 3 months,  10 gave a Buy rating, 1 gave a Sell rating, and 6 remain neutral. The average 12-month price target for the stock is $161, marking a 112% upside from where shares last closed.

Cabot Oil and Gas Corporation (NYSE:COG) is down over 5% after the company issued a public offering of 44 million share of common stock yesterday, valued at a slightly discounted $20 per share until February 26, 2016. The company will use the funds to help repay its debt under its revolving credit facility and for other capital needs. The company also released Q4:2015 earnings on Friday, posting revenues of $281 million, below consensus of $324 million, and a loss per share of ($0.02), in line with consensus estimates.

According to TipRanks’ statistics, out of the 7 analysts who have rated the company in the past 3 months, 3 gave a Buy rating while 4 remain on the sidelines. The average 12-month price target for the stock is $21.83, marking a 1% upside from where shares last closed.