With Greece’s lawmakers officially approving the austerity measures that will provide much-needed bailout funding, the drama that allegedly has been holding the market back has now lifted.
The S&P 500 gained 0.8% on the news, closing at 2,124.29 on Thursday.
Not every stock participated in the rally, though, Under Armour Inc. (NYSE:UA), Sherwin-Williams Co. (NYSE:SHW) and General Motors Company (NYSE:GM) were well underwater today, albeit for understandable reasons.
Here’s a look at today’s worst stocks.
Sherwin-Williams (SHW)
Paint company Sherwin-Williams may have improved its top and bottom lines on a year-over-year basis last quarter. But, it still wasn’t enough to satisfy Wall Street. Earnings of $3.70 per share fell short of the $3.81 per share of SHW the pros had called for, while revenue of $3.13 billion was $130 million less than the $3.26 billion analysts had predicted.
Sherwin-Williams also offered disappointing guidance for the current quarter. The company now foresees a profit of between $3.75 and $3.90 per share. Analysts had been expecting a Q3 bottom line of $4.14 per share of SHW.
Between the two doses of alarming news, Sherwin-Williams didn’t have a chance on Thursday. SHW traded as much as 11% lower before settling back to close at a loss of more than 7%.
Under Armour (UA)
Under Armour didn’t do anything wrong to deserve the 3.3% plunge the stock suffered today. Some crowd-sourced media and a second-tier research outfit all coincidentally ganged up on UA today, and the market listened.
Market Realist’s Phalguni Soni and Yahoo! Finance contributor Ophir Gottlieb weighed in against UA in a manner that was less than flattering. Soni simply opined about “The Headwinds Likely to Affect Under Armour’s 2Q15 Results,” while Gottlieb pointed out that competitor Nike Inc. (NYSE:NKE) was “crushing it.”
It wasn’t much of a stretch for traders to come to the conclusion that what’s good for Nike is bad for Under Armour.
The bulk of today’s damage done to UA, though, was most likely sparked by a downgrade from relatively obscure research house OTR Global, which now scores Under Armour at a “mixed” rating based on delayed deliveries.
General Motors (GM)
Last but not least, General Motors shares lost nearly 3% of their value on Thursday following a downgrade and a target-price cut from Barclays.
Barclays analyst Brian Johnson said:
“[W]hile some would argue that cheap valuation, a solid dividend, and ongoing share buybacks make the stock compelling, these items are likely irrelevant in an environment of deteriorating macro and negative earnings revisions…We expect China headwinds to spark a round of negative earnings revisions and guidance cuts for GM. And given auto stocks (and the OEMs specifically) typically correlate to the direction of earnings, we have a tough time seeing GM stock outperforming through the earnings revisions.”
The downgrade was only from an “overweight” rating to “equal-weight,” but between the downgrade and the lower price target (from $44 to $36 per share), GM owners simply got spooked.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
