Traders didn’t start the new trading week quite in the same bullish mood they were in when they wrapped up last week’s trading. Although the market poked its head into positive territory a couple of times on Monday, by the time the closing bell rang, the S&P 500 was at 2,436.10, down 0.12%.
Here’s a look at what upended each name.
Snap Inc (SNAP)
Not that analyst doubts about the future of Snapchat parent Snap are anything new, but there is something about seeing them in print that can spook investors.
JPMorgan did the deed today, lowering its price target on SNAP from $20 to $18, and simultaneously establishing a neutral rating on the stock. Analyst Doug Anmuth is concerned that the company could struggle to monetize its user base, and may not be able to turn any sort of a profit until 2020. Anmuth thinks the year-over-year comparisons for the upcoming quarterly report will roll in 20% weaker as the Olympics and a heated race for President kept users glued to the platform in mid-2016.
Snap stock was only down 4.2% following the release of the pessimistic opinion. But, with today’s setback, SNAP shares are also down 30% from March’s post-IPO peak, and still fighting what appears to be a losing battle.
Incyte Corporation (INCY)
On the surface, the data Incyte presented this weekend at the annual ASCO conference is compelling. The combination of its enzyme inhibitor epacadostat and Keytruda, from Merck & Co., Inc. (NYSE:MRK), had an overall response rate of 35%. That’s statistically significant enough to get the Food and Drug Administration’s nod of approval.
A closer look at the data, however, isn’t quite as encouraging to INCY shareholders.
For whatever reasons, Incyte excluded the trial data for three patients in the study, and the study is already suspiciously small at only 43 patients. The information for those other three individuals existed. Incyte just chose not to incorporate it into its presentation.
INCY shareholders understandably interpreted it as a red flag, sending the stock to a loss of 5.7% for Monday’s session.
Herbalife Ltd. (HLF)
Finally, vitamin and supplement outfit Herbalife saw its stock dip 6.6% after the company culled its revenue outlook for the quarter currently underway.
For its second fiscal quarter ending this month, Herbalife now expects to report growth of between only 2% and 6%.
Though the company also upped its Q2 profit forecast from a range of 88 cents to $1.08 per share to a range of between 95 cents and $1.15 per share of HLF, activist investor and Herbalife bear Bill Ackman was quick to chime in, pointing out the fact that the lowered guidance comes after raised guidance from May 4, and after a handful of insiders sold their sizable stakes.
He’s not making an accusation, but it certainly doesn’t look good.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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