The bulls got hold of the market early on the President’s inauguration day, but they didn’t keep their grip. Up as much as 0.58% at one point in the middle of the day, the S&P 500 ended the session at 2,271.31, up only 0.34%.
It could have been worse, though, and for owners of Rite Aid Corporation (NYSE:RAD), General Electric Company (NYSE:GE) and Bristol-Myers Squibb Co (NYSE:BMY) it was worse. These three stocks dished out the most suffering to shareholders.
Here’s the deal.
Bristol-Myers Squibb Co (BMY)
Bristol-Myers Squibb caught BMY shareholders a bit off-guard on Friday, announcing it would not seek a “fast track” approval for its Opdivo as a therapy for lung cancer.
The Food and Drug Administration’s so-called ‘fast track” path to a drug’s approval is meant to facilitate bringing a much-needed treatment to the market when the need for a superior solution is dire and the benefit of the drug in question is clear. Many BMY shareholders had widely presumed the combination of Bristol-Myers Squibb’s Opdivo and Yervoy would be fast-tracked. The company told them today, though, it wouldn’t even ask for the accelerated review protocol.
The decision doesn’t inherently imply weak results for the combination of drugs in clinical trials. It does suggest, however, the company doesn’t feel the FDA would be overly impressed by its results.
BMY lost 11.3% of its value on Friday.
General Electric Company (GE)
General Electric may have offered a 2017 outlook that was in line with expectations, but the sales and earnings misses for Q4 and the failure to not up the ante on 2017 was treated like a glass-half-empty situation. GE shares lost 2.2% of their value today.
Last quarter, GE earned 39 cents per share on revenue of $33.09 billion. Analysts, however, were looking for a profit of 46 cents per share and a top line of $33.63 billion. Weakness from its energy division was a key culprit in the shortfall. That unit’s revenue fell 22%, while its energy connections and lighting division saw a 29% dip in business.
For the current year, the company anticipates posting a profit of between $1.60 and $1.70 per share, in line with consensus estimates of $1.66. General Electric earned 89 cents per share for the full year.
Rite Aid Corporation (RAD)
Last but not least, Rite Aid lost 13.3% on Friday in the wake of news that its impending union with Walgreens Boots Alliance Inc (NASDAQ:WBA) may not be the sure thing investors were thinking it was just yesterday. In simplest terms, the Federal Trade Commission is balking at Walgreens’ plans to avoid any antitrust/monopoly pitfalls just by selling 865 of its stores. It may not be enough.
While Walgreens Boots Alliance could largely shrug it off should the federal government watchdog put the brakes on the deal, Rite Aid may not fare so well. Evercore ISI analyst Ross Muken opined that RAD shares could fall as much as $3.50 (or more) if the deal doesn’t happen. The stock closed at $7.22.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
