Schaeffer's Trading Floor Blog

Analyst Upgrades: Citigroup Inc, Visa Inc, and Southwest Airlines Co

Analysts upwardly revised their ratings on C, V, and LUV

by 4/15/2014 9:20 AM
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Analysts are weighing in today on financial heavyweight Citigroup Inc (NYSE:C), credit card issuer Visa Inc, and airline operator Southwest Airlines Co (NYSE:LUV). Here's a quick roundup of today's bullish brokerage notes.

  • Bernstein upgraded C to "outperform" from "market perform," and lifted its price target by $5 to $57, after yesterday morning's earnings win sent the stock 4.4% higher to close at $47.67. Nevertheless, C shares remain 8.5% below their year-to-date breakeven mark, and could come face to face with more technical headwinds in the near term. To be specific, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.59 ranks in the 20th annual percentile, indicating short-term speculators are more call-heavy than usual on the underperformer. This means, should Citigroup Inc continue on its downward trajectory, option bulls may hit the exits, which could create additional pressure on the shares.

  • Although V has shed about 9% over the past month to trade at $201.01, the stock received its second bullish brokerage note of the week, when Janney upgraded its rating to "buy" from "neutral" this morning. On the options front, Visa Inc sports a SOIR of 0.66, which ranks just 1 percentage point from a 12-month low. In other words, short-term speculators have been more call-biased than usual, with call open interest outpacing put open interest by a margin of 3-to-2 among options expiring within the next three months.

  • LUV received a ratings lift to "buy" from "hold" at Argus, after yesterday announcing a record-setting profit-sharing plan for its employees this year. While Southwest Airlines Co has tacked on 19.5% so far this year to trade at $22.51, its SOIR of 0.79 ranks in the 80th annual percentile, demonstrating activity in the stock's short-term options pits is more put-heavy than usual. As such, a continuation of LUV's uptrend may cause a capitulation of bearish bettors, which could offer the shares additional support.

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