Rattled by lowered economic-growth expectations in the shadow of an increasingly likely rate hike, stocks got the new week started deep in the hole. Specifically, in the wake of a forecast from the OECD that global economic growth in 2016 is going to be a more tempered 3.3% rather than a prior estimate of 3.6%, the S&P 500 lost 0.98% on Monday, ending the session at 2078.63.
And for Macy’s, Inc. (NYSE:M), Juniper Networks, Inc. (NYSE:JNPR) and Priceline Group Inc (NASDAQ:PCLN), it was much, much worse. Here’s why.
Priceline Group (PCLN)
In light of the news unveiled this morning, Priceline Group never even had a chance on Monday.
Last quarter, Priceline booked a profit of $23.41 per share on $3.1 billion in sales. That’s well up from the bottom line of $20.03 from the third quarter of last year. And, revenue was up a bit more than 9% on a year-over-year basis.
Traders couldn’t get past the Q4 outlook though. The online travel agent is looking for a profit of between $11.10 and $11.90 per share, versus analyst expectations of $12.38 per share of PCLN, sending shares down more than 9% for the day.
It should be noted that (unwarranted) pessimism is usually par for the course for PCLN.
Juniper Networks (JNPR)
Telecom networking giants Ericsson (NASDAQ:ERIC) and Cisco Systems, Inc. (NASDAQ:CSCO) are teaming up, and that spells bad news for rival Juniper Networks.
On Monday morning, Cisco and Ericsson announced they would be collaborating to develop and market back-end technology for use by telecom service providers. The two company’s each anticipate additional revenue of $1 billion by 2018 thanks to the joint effort.
The news was something of a double-blow to JNPR shares, which fell more than 7% on the heels of the announcement. Not only will Juniper Networks now be facing a more formidable opponent in the networking technology space, the news quickly quelled expectations that Juniper might be an acquisitions target for Ericsson.
Macy’s (M)
Last but not least, Macy’s shares lost more than 5% of their value today after Citi analysts lowered their target price on M stock and simultaneously lowered its full-year profit outlook for the retailer. Citi analyst Paul Lejuez said:
“Based on our channel checks and commentary from vendors including KORS and RL (covered by Citi analyst Kate McShane), we believe the department store channel had a tough quarter (and faces a challenging future). Warm weather combined with already weak traffic trends likely led to a shortfall in sales and we expect inventory to appear elevated across the sector. We believe this is particularly true for the mid-tier players, and we are lowering our estimates/TP for M and KSS.”
Lejuez now says Macy’s shares are only worth $48 rather than his prior target of $52, and is now looking for a profit of only $4.45 per share of M in 2015, down from a prior expectations of $4.51.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
