Between the lingering threat of a rate hike in the United States and sustained uncertainty regarding Greece’s debt, traders maintained their selling mindset today. The S&P 500 ended the session down 0.65%, at 2,079.28.
It could have been worse, though. And for owners of United Continental Holdings Inc. (NYSE:UAL), eBay Inc. (NASDAQ:EBAY) and Wynn Resorts, Limited (NASDAQ:WYNN), it was worse. These three names dished out big losses, and were largely spurred lower by analysts.
United Continental Holdings (UAL)
The airline rout continues, with today’s selling being led by United Continental Holdings. UAL, however, had a company-specific prod for its group-leading pullback.
While the possibility of too much passenger capacity is still weighing on investors’ minds as much as it’s weighing down United Continental Holdings shares, Raymond James analyst Savanthi Syth doesn’t even believe excess capacity is the most signifying problem the air carrier faces at this point.
Plain ol’ lack of demand stemming from anemic economic growth is the reason Syth downgraded UAL today, from a “strong buy” to an “outperform”.
“[We] are lowering our 2015E EPS for United from $11.07 to $10.20 (+101% y/y) and our 2016E EPS from $11.25 to $10.50 (+3% y/y), reflecting Brent forecast of $66 and $82 respectively. Given the lower near term upside, we are downgrading United Continental from Strong Buy to Outperform.”
United Continental Holdings shares finished the day down more than 4%.
Wynn Resorts (WYNN)
Airlines weren’t the only group to be undermined by pessimistic analysts on Monday. Casinos were in analysts’ sights too, with Wynn Resorts leading the selloff.
The selling was mostly spurred by a Sterne Agee report published this morning. In it, analyst David Bain predicted that Macau’s gaming revenue — where Wynn Resorts has bet (pun intended) much of its future — would likely fall between 33% and 38% this month on a year-over-year basis.
With Macau gaming revenue already crimped by a crackdown on gambling syndicates, dwindling revenue is projected to thin even more now that new smoking regulations are going into effect.
All told, WYNN fell 6% today. Shares are now off 58% from their March 2014 peak.
eBay (EBAY)
Investors innately knew PayPal was the more impressive division of eBay. It didn’t become clear just how much weight PayPal was carrying, however, until the company released those details this morning in preparation for the upcoming spinoff of the payment platform. Next year, without PayPal lending a helping hand, the company believes its online marketplace will only drive growth of somewhere between 0% and 5%. Analysts had been expecting an average of 5.2% growth.
It may have been a note from Piper Jaffray, though, that drove most of today’s near-4% drop from EBAY. The research outfit suggested that, even though PayPal was the company’s bright spot, it wasn’t as bright as many believe. Jaffray anticipates heightened competition in the payment space, so much so that it made a point of reiterating its underweight rating on EBAY … even before the spinoff is completed.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
