Schaeffer's Trading Floor Blog

Analyst Update: Yelp Inc, Pandora Media Inc, and JPMorgan Chase & Co.

Analysts are weighing in on YELP, P, and JPM

by 5/12/2014 2:03 PM
Stocks quoted in this article:

A round of M&A activity and a rebound in the tech sector have ushered the major market indexes into the black this afternoon. Meanwhile, among the equities in focus are online review concern Yelp Inc (NYSE:YELP), streaming music provider Pandora Media Inc (NYSE:P), and blue-chip financial firm JPMorgan Chase & Co. (NYSE:JPM), which have all attracted the attention of analysts.

  • YELP has advanced 3.5% to wink at $56.11, as a social-media halo lift has overshadowed a price-target cut to $67 from $95 at Stifel. However, the shares are still more than 18.7% lower year-to-date, and continue to stare up at their 10-day and 20-day moving averages -- a duo that has stifled all but one of Yelp Inc's daily closes since early March. Despite its long-term downtrend, the equity boasts 23 "buy" or better ratings, compared to six "holds" and not a single "sell." Meanwhile, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.55 stands higher than just 17% of all other readings from the past year, suggesting short-term options players are more call-biased than usual right now. Should YELP cower in the face of familiar resistance, a shift in sentiment could exacerbate selling pressure on the shares.

  • P has added 4.7% to flirt with $23.68, after MKM Partners upgraded the stock to "buy" from "neutral." In light of today's bounce, the stock is on pace to end atop its 10-day moving average for the first time since April 24. From a longer-term perspective, Pandora Media Inc has surrendered 10.9% so far in 2014, and has given up 41.4% since touching a record high of $40.44 on March 5. Nevertheless, today's bullish brokerage attention was nothing new for P, which sports 15 "buy" or better endorsements, compared to eight "holds" and just one "strong sell." Likewise, the equity's SOIR of 0.45 ranks in the 14th percentile of its annual range, pointing to a bigger-than-usual call focus among options expiring within three months. Should P continue its longer-term downtrend, a round of downgrades and/or a mass exodus of option bulls could translate into additional headwinds.

  • Finally, JPM has tacked on 1.1% to trade at $54.62, in spite of a price-target cut to $65 at Jefferies ahead of the bell. The equity has underperformed the broader S&P 500 Index (SPX) by more than 9 percentage points during the past three months, and remains 6.6% lower year-to-date. While analysts remain largely optimistic -- 15 out of 20 offer up "buy" or better recommendations -- the options crowd has grown increasingly skeptical of JPMorgan Chase & Co. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.85 sits just 2 percentage points from a 12-month peak. In other words, option buyers have picked up JPM puts over calls at a near-annual-high clip during the past couple of weeks.

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