With nothing in the way of news to upset the apple cart on Tuesday, investors were content to pick up where they left off on Monday. Today’s close of 2,212.23 for the S&P 500 was 0.34% stronger than the prior day’s close, putting the index back within easy striking distance of record highs.
It wasn’t a day of progress for all stocks, however. Rent-A-Center Inc (NASDAQ:RCII), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Chipotle Mexican Grill, Inc. (NYSE:CMG) were all sent into the red on Tuesday following news that spooked a few too many shareholders.
Here’s a closer look at each company’s latest red flags.
Chipotle Mexican Grill, Inc. (CMG)
Just when it looked like Chipotle Mexican Grill might have finally worked its way past the memory of an E. coli outbreak late last year that ended up upending CMG shares, something comes along to stir that pot once again. The odd part about today’s upheaval, however, was that Chipotle Mexican Grill did it to itself.
The crux of the blame lies with co-CEO Steve Ells, who confessed on Tuesday that he’s concerned the restaurant chain may not be able to meet its full-year guidance. He poured salt in the wound be adding that poor customer service could be contributing to the failing recovery effort.
Ells’ comments prompted some comments from TIAA Global Asset Management managing director Stephanie Link, who called Chipotle a “broken growth story.”
CMG ended the day down 7.5%.
Teva Pharmaceutical Industries Ltd (ADR) (TEVA)
Already down 48% from its July-2015 peak, Teva Pharmaceutical Industries shares lost another 5.3% of their value today in the wake of news that a key executive would be leaving the company. Siggi Olfasson, president and CEO of Teva’s generic medicines arm, will be stepping down sometime during the first quarter of the coming year.
While any key departure can be disruptive, this one could be especially problematic for Teva. As Credit Suisse analysts Vamil Divan and Barbara Kotei explained, “Olafsson’s background and experience both at TEVA and the former ACT left him uniquely qualified to run the now combined generics businesses from those two firms.”
Rent-A-Center Inc (RCII)
Finally, Teva wasn’t the only stock to get hit hard in the wake of a key executive’s resignation. Rent-A-Center made an announcement similar to the one from Teva Pharmaceutical, and RCII owners suffered the same fate TEVA shareholders did … only worse.
Guy Constant has resigned from his position as Vice President and Chief Financial Officer of Rent-A-Center. He’ll temporarily be replaced by Maureen Short.
To what extent it was prompted by Constant’s departure isn’t clear, but Raymond James downgraded Rent-A-Center from a “Strong buy” to a “Market perform” on Tuesday, and altogether removed its price target of $16 for RCII.
RCII shares finished the session with a 9.6% loss.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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