Schaeffer's Trading Floor Blog

Analyst Update: Facebook Inc (FB), 3D Systems Corporation, and Cisco Systems, Inc.

Analysts are weighing in on FB, DDD, and CSCO

by 3/11/2014 12:28 PM
Stocks quoted in this article:

The broad-market indexes are lower at midday, after spending the morning on both sides of breakeven. Meanwhile, among the equities in focus are social networking concern Facebook Inc (NASDAQ:FB), 3-D printing firm 3D Systems Corporation (NYSE:DDD), and big-cap tech titan Cisco Systems, Inc. (NASDAQ:CSCO), which have all attracted the attention of analysts.

  • FB touched a record high of $72.59 out of the gate this morning, after scoring a double dose of upbeat brokerage attention. Specifically, Citigroup lifted its price target on the stock to $85 from $70, while Evercore hiked its target to $64 from $60. The adjustments mark the second and third price-target increases for FB this week, and there could be plenty more on the way; the consensus 12-month price target among analysts sits at $71.86, representing a discount to FB's new high. Meanwhile, the stock's 10-day put/call volume ratio of 0.47 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands just 14 percentage points from an annual peak, pointing to relatively accelerated put buying of late. An unwinding of bearish options positions could also translate into contrarian tailwinds for Facebook Inc. At last check, the stock has trimmed its lead to 0.4% to flirt with $72.29.

  • DDD is 1.2% higher at $64.67, after Stephens upgraded the shares to "overweight" from "equal weight." In Monday's trading, the stock bounced from its supportive 40-week moving average, which acted as a springboard almost a year ago. On the sentiment front, short sellers increased their bearish exposure by 55% during the past two reporting periods, and short interest now represents almost one-quarter of 3D Systems Corporation's total available float. Furthermore, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.13 stands higher than 88% of all other readings of the past year, suggesting option buyers are picking up DDD puts over calls at a faster-than-usual clip. Should DDD resume its long-term uptrend, a mass exodus of bears could add fuel to the equity's technical fire.

  • Finally, CSCO is fractionally higher at $21.72, after Bernstein launched coverage with an "outperform" endorsement and a $30 price target -- 38.1% north of the stock's current price, and in territory not charted since late 2007. While most analysts are already in CSCO's corner -- 18 out of 25 consider it a "buy" or better -- options traders have shown a healthier-than-usual appetite for long puts over calls. The security's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.61 ranks in the 70th percentile of its annual range, as does the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.69. What's more, now is an opportune time to gamble on Cisco Systems, Inc.'s short-term trajectory, as the equity's Schaeffer's Volatility Index (SVI) of 16% sits 3 percentage points from a 12-month low. In simpler terms, CSCO's short-term options are attractively priced right now, from a volatility standpoint.

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