Schaeffer's Trading Floor Blog

Analyst Update: QUALCOMM, Inc., McDonald's Corporation, and Wells Fargo & Co

Analysts are weighing in on QCOM, MCD, and WFC

by 6/2/2014 2:25 PM
Stocks quoted in this article:

The major market indexes are modestly higher this afternoon, as Wall Street weighs the latest economic data and eyes Apple Inc.'s (NASDAQ:AAPL) Worldwide Developer Conference, which just kicked off in San Francisco. Meanwhile, among the equities in focus are tech concern QUALCOMM, Inc. (NASDAQ:QCOM), blue chip McDonald's Corporation (NYSE:MCD), and financial firm Wells Fargo & Co (NYSE:WFC), which have all attracted the attention of analysts.

  • QCOM is up 0.4% at $80.37, after sector peer Broadcom Corporation (NASDAQ:BRCM) said it may sell its cellular baseband business. The move "further improves QCOM positioning especially at key accounts … and opens up more opportunities in China," opined analysts at Sterne Agee. QCOM is already beloved by the analyst community, boasting 20 "buy" or better ratings, compared to five "holds" and not a single "sell." Likewise, on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 2.91 stands just 4 percentage points from an annual high -- pointing to a healthier-than-usual appetite for bullish bets over bearish of late. What's more, short-term speculators can gamble on QUALCOMM, Inc. at a relative discount. The stock's Schaeffer's Volatility Index (SVI) is perched at a 12-month low of 12%, suggesting front-month options are inexpensive right now, from a historical standpoint.

  • MCD has tacked on 0.6% to $102.02, and is poised to end north of its 10-day moving average for the first time since May 16. Bolstering the equity was a price-target hike to $103 from $96, courtesy of Credit Suisse -- marking the stock's second straight bullish brokerage note. However, despite outperforming the broader S&P 500 Index (SPX) during the past three months, McDonald's Corporation's bullish bandwagon is far from crowded. In fact, half of the 20 analysts following the security maintain tepid "hold" opinions. Meanwhile, the consensus 12-month price target of $106.19 stands within striking distance of MCD's current price. Should the security extend its upward momentum -- or should the firm report stronger-than-expected monthly sales next Monday -- additional upgrades and/or price-target hikes could propel MCD even higher.

  • Finally, WFC has advanced 0.5% to $51.03, and earlier touched a new record high of $51.17, thanks to a price-target hike to $49 from $47 at SocGen. However, the brokerage firm wasn't so kind to sector peers Citigroup Inc (NYSE:C) and Goldman Sachs Group Inc (NYSE:GS) … WFC is now 12.4% higher year-to-date, but still gets no respect on the Street. Eleven out of 21 analysts offer up "hold" or "strong sell" ratings, and the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.46 sits just 2 percentage points from an annual bearish peak. As Wells Fargo & Co extends its quest for record highs, more upbeat analyst attention and/or a shift in sentiment among option buyers could translate into additional tailwinds for the shares.
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