VeriFone (PAY), Genesco (GCO): Analysts Slashed Their Price Targets On These 5 Stocks Last Week

Although the fundamental prospects for many companies are strong given the robust U.S. economy and low unemployment rate, some analysts became quite a bit less bullish on several companies last week.

AbbVie Inc (NYSE:ABBV), Genesco Inc. (NYSE:GCO), VeriFone Systems Inc (NYSE:PAY), Computer Programs & Systems, Inc. (NASDAQ:CPSI), and Corrections Corp Of America (NYSE:CXW) were among the companies whose price targets were slashed by at least one analyst firm last week. In this article, we’ll examine why the analysts cut their target marks on these stock and use the latest SEC filings to determine whether the smart money agrees or disagrees with them.

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AbbVie Downgraded

According to Marketbeat, analysts at Credit Suisse slashed their price target on AbbVie Inc (NYSE:ABBV) to $64.03 per share from $82 last week. Sentiment towards many big Pharma stocks has turned negative due to the Mylan NV (NASDAQ:MYL) EpiPen controversy, in which Mylan has raised the price of the essential medication by 4-fold since 2007. The controversy has renewed concerns over future drug pricing and greater industry regulation. Our data shows that hedge funds became a tad less bullish on AbbVie in the second quarter. Out of the 749 hedge funds that we track which filed 13F’s for the June quarter, 57 were long AbbVie Inc (NYSE:ABBV) at the end of June, down by eight funds from the end of the previous quarter.

Weak Comps Sink Genesco 

Analysts at Baird weren’t fans of Genesco Inc. (NYSE:GCO) last week, as the firm cut its price target on the retailer to $53 per share from $80. The price cut followed a disappointing second quarter earnings release issued by Genesco Inc. (NYSE:GCO) on September 1, in which the retailer reported that comparable-store sales fell by 2% company-wide and that its Journeys Group comparable-store sales retreated by 4% year-over-year. Guidance was weak too, as Genesco’s management expects full-year 2016 comparable-store sales to decline in the low-single-digit range. The analysts said that “the stunning comps falloff at Journeys provides too many uncertainties related to the timing and shape of a recovery.” Not many hedge funds owned Genesco in the second quarter. According to our records, 11 funds that Insider Monkey tracks had a bullish position in Genesco Inc. (NYSE:GCO) at the end of June, down by three from the end of March.

On the next page we’ll examine why analysts slashed their price targets on VeriFone Systems, Computer Programs & Systems, and Corrections Corp Of America last week.

VeriFone Downgraded Due to Earnings

Analysts at multiple investment banks cut their price targets on VeriFone Systems Inc (NYSE:PAY) after the company reported disappointing results for its fiscal year 2016 third quarter. Although VeriFone’s EPS beat estimates by $0.02, with earnings of $0.42, the company’s revenue missed the consensus mark by $22.54 million, coming in at $493 million. Among some of the price target cuts were RBC Capital Markets lowering their price target on the stock to $23 from $28 and Stifel Nicolaus cutting its target price to $18 from $26. Hedge funds were slightly more optimistic on the stock in the second quarter. 24 funds in our system owned shares of VeriFone Systems Inc (NYSE:PAY) at the end of June, up by three quarter-over-quarter.

Computer Programs & Systems Target Lowered

Although there wasn’t any meaningful fundamental news concerning the stock last week, investment firm Leerink Swann cut its price target on Computer Programs & Systems, Inc. (NASDAQ:CPSI) to $26 from $45 on September 1, while reiterating its ‘Market Perform’ rating on it. Given that Computer Programs shares are presently trading close to that level, the analysts likely lowered their price target to be more in-line with the market. Hedge funds were underweight Computer Programs & Systems, Inc. (NASDAQ:CPSI) on June 30, as 13 funds that we track owned just 3.20% of its shares.

Corrections Corp Targets Trending Lower

Analysts at SunTrust Banks poured some salt on Corrections Corp Of America (NYSE:CXW)‘s wound after they lowered their price target on the company’s stock to $20 from $34 on September 1. Shares of Corrections Corp Of America (NYSE:CXW) have fallen sharply since Deputy Attorney General Sally Yates said in August that her goal (and that of the Justice Department) is “reducing — and ultimately ending — our use of privately operated prisons.” As a note, many private prison stocks have other customers outside of the DOJ’s Bureau of Prison. Only 15 hedge funds that we follow were long Corrections Corp Of America (NYSE:CXW) at the end of June.

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