Bankrate Downgraded, Shares Drop, Takeover Now Unlikely

Bankrate (RATE) shares are getting whacked Thursday morning following downgrades of the stock by several analysts, and reports that insiders sold a large block of shares.

CIBC’s Jason Helfstein and RBC Capital’s Jordan Rohan both wrote today about the insider selling. Rohan says insiders sold 1.2 million shares at $50, which “would suggest that a deal to sell the company is not likely any time soon.” Helfstein writes that he believes the block includes 600,000 shares from Chairman Peter Morse. He also writes that “this should effectively remove any speculation that the company is sold in the near term.”

Rohan cut his rating on the stock to Sector Perform from Outperform, and trimmed his price target to $55 from $59. In addition to the reduced chances of an acquisition, Rohan says that “despite its resilient business model, the current premium valuation will be difficult to sustain if we are in the early innings of a significant bank crisis,” which happens to be what RBC’s bank analyst and market strategist believe.

Helfstein cut his rating on the stock to Sector Underperformer from Sector Performer. He notes that the stock had been 13% above his price target, and adds that he sees “risks of slowing graphical ad growth.” Helfstein adds that a jump in the company’s shares since it reported earnings was likely driven by short covering - short interest was 43% of the stock’s float in mid-October.

Bankrate Thursday is off $7.60, or 14.6%, at $44.50.