The stock market was mostly higher on Monday, with market participants celebrating favorable economic news on the consumer front and looking forward to another round of positive earnings reports when third-quarter earnings season starts early next month. Tax cuts have helped corporate earnings throughout 2018, and that's generally helped to lift the overall market. Yet even with several major market benchmarks at or near record levels, some stocks weren't able to participate in the gains today. Brown-Forman (BF.B 1.88%), Acorda Therapeutics (ACOR -3.82%), and Energy XXI Gulf Coast (NASDAQ: EGC) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Brown-Forman looks a little tipsy
Brown-Forman lost 6% as investors seemed to respond to analyst comments last week that raised questions about the spirits company's future growth prospects. Analysts at Jefferies gave Brown-Forman a hold rating and set a $49 price target on the stock. Despite having a generally favorable viewpoint about the alcohol industry broadly, Brown-Forman's shares have a fairly rich valuation at current levels, in Jefferies' view. That's not necessarily bad in the long run, but short-term-minded traders are troubled enough by the comments to bid the stock's price lower.
Acorda drops on court ruling
Acorda Therapeutics plunged 24% after the Federal Circuit Court of Appeals upheld a federal trial court's ruling that invalidated four patents related to Acorda's multiple sclerosis treatment, Ampyra. Bulls had hoped that the appeals court would overturn the lower court's 2017 ruling, and Acorda CEO Ron Cohen still believes the patents behind Ampyra were valid. Acorda said it would consider further appeal options, including either a request for an en banc rehearing of the Federal Circuit or petitioning the Supreme Court to hear the case, but investors seem to be conceding that the company is unlikely to win on this case in the long run.
Energy XXI has to wait a little bit longer
Finally, Energy XXI Gulf Coast dropped 6%. The company said this morning that it had amended its merger agreement with acquirer Cox Oil to allow for the closing date for their deal to occur on Oct. 10. Energy XXI shareholders have already approved the merger, but the two companies had initially expected that the deal would be complete at some point during the third quarter. Today's modest decline seems to reflect fears that some last-minute hiccup could put a stop to the deal, despite the economies of scale that Cox and Energy XXI both acknowledge would be realized through a merger. With so much consolidation going on in the oil business, small companies like Energy XXI have little choice but to combine forces in order to survive.