Why Valeant Pharmaceuticals, Manhattan Associates, and NCR Slumped Today
The stock market was generally flat on Friday, with major benchmarks finishing narrowly mixed. Oil prices fell below the $50-per-barrel mark, spurring pessimism in the energy industry, and the key French election could signal whether Europe is likely to keep seeing internal turmoil in its political union going forward. Even though some positive news on the domestic front helped cushion the blow for investors, a few individual stocks were felled by bad news. Among the worst performers for the day wereValeant Pharmaceuticals International(NYSE: VRX), Manhattan Associates (NASDAQ: MANH), and NCR (NYSE: NCR). Below, we'll look more closely at these stocks to tell you why they did so poorly.
Valeant takes another hit
Shares of Valeant Pharmaceuticals International finished down 4% as investors continued to question the company's long-term viability. The drug company made news in pricing its Siliq plaque psoriasis treatment at $3,500 per month, once again getting attention from consumer advocates who have taken issue with the high price of prescription drugs across the industry. In addition, analysts at Wells Fargo weren't happy about Valeant's lack of progress in resolving long-term debt issues, noting that even though the company has a while before most of the debt comes due, Valeant will nevertheless face major issues if it can't boost its free cash flow considerably. Wells cut its price target on the stock to a new range of $7 to $9 per share, and that could also reflect worries that Valeant might need to make secondary stock offerings in order to restructure debt more viably over the long haul.
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Manhattan sees more tough times ahead
Manhattan Associates stock dropped 9% after the company reported its first-quarter financial results late Thursday. The supply chain management company said that revenue fell 4% from year-ago levels, with double-digit sales declines in the key Americas region. The pace of bringing new business on board slowed, and Manhattan reduced its sales guidance for the remainder of the year. With the company now potentially seeing no sales growth at all for 2017, the big question Manhattan faces is whether the retail industry will see marked improvement from the difficult conditions that it has dealt with for more than a year now. Given the ongoing shift toward online shopping in the U.S. and around the world, investors seem to believe that the odds of a quick turnaround for retail are slim enough to make Manhattan Associates stock a risky proposition.
NCR falls flat despite solid results
Finally, shares of NCR finished down 8%. The payment technology company said that sales rose 2%, and adjusted earnings were better than investors had expected. Software licensing posted solid gains, and declines in the hardware segment were largely related to NCR's sale of its Interactive Printer Solutions business. Yet guidance that NCR gave for the second quarter was somewhat weaker than the consensus forecast among those following the stock, and some fear that strong competition in the space could eat into NCR's competitive advantages over time. With the company prepared to execute more stock buybacks in the near future, NCR should be rooting for lower share prices to make its repurchases even more effective in boosting earnings growth in the future.
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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. The Motley Fool recommends Manhattan Associates and NCR. The Motley Fool has a disclosure policy.