Schaeffer's Trading Floor Blog

Analyst Upgrades: Cisco Systems, Inc., Nokia Corporation (ADR), and Michael Kors Holdings Ltd

Analysts upwardly revised their ratings on CSCO, NOK, and KORS

by 5/27/2014 8:58 AM
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Analysts are weighing in today on tech giant Cisco Systems, Inc. (NASDAQ:CSCO), Finnish phone concern Nokia Corporation (ADR) (NYSE:NOK), and upscale retailer Michael Kors Holdings Ltd (NYSE:KORS). Here's a quick roundup of today's bullish brokerage notes.

  • CSCO is flirting with a 1.8% lead ahead of the bell, after Deutsche Bank upgraded the stock to "buy" from "hold." The brokerage firm also lifted its price target by $5 to $30 -- in six-year-high territory for the blue chip, which closed at $24.52 on Friday. Despite outperforming the broader S&P 500 Index (SPX) by more than 10 percentage points during the past three months, Cisco Systems, Inc.'s short-term options players have rarely been more put-heavy during the past year; the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.84 stands just 4 percentage points from an annual high. However, the speculators are picking up CSCO option contracts at a relative discount, as the equity's Schaeffer's Volatility Index (SVI) of 14% stands at an annual low.

  • NOK is pointed 0.3% lower ahead of the bell, despite receiving an overnight price-target hike to $11 from $10.25 at Canaccord Genuity. The stock has advanced 4.5% so far this month, with help from a bullish note at Jefferies last week. The security -- which finished at $7.84 on Friday -- is now facing a familiar hurdle in the $7.90-$8 range, which has stalled NOK's rally attempts for most of 2014. Nevertheless, options players remain optimistic, as the shares' SOIR of 0.60 stands higher than just 20% of all comparable readings from the past year. Likewise, the stock sports a 10-day call/put volume ratio of 6.48 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio registers in the 87th percentile of its annual range, pointing to a healthier-than-usual appetite for Nokia Corporation (ADR) calls over puts during the past two weeks.

  • Finally, KORS is headed for a 1.9% leap out of the gate, after Wedbush lifted its price target to $108 from $100 and reiterated its "outperform" recommendation. This will be the second straight analyst-induced pop for KORS, which jumped 2.9% on Friday after a price-target hike to $111 from Cowen and Company. However, the bullish bandwagon is far from crowded, despite the stock's year-to-date advance of 18.7%. The security's SOIR of 1.17 sits just 16 percentage points from an annual peak, five out of 15 analysts maintain "hold" or worse opinions, and the consensus 12-month price target of $105.59 represents expected upside of just 9.5% from KORS' closing price of $96.40 on Friday. Should the equity extend its advance, or should Michael Kors Holdings Ltd report stronger-than-expected quarterly earnings tomorrow morning, an unwinding of pessimism in the options pits and/or more upbeat analyst attention could add fuel to the stock's fire.
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