Schaeffer's Trading Floor Blog

Analyst Upgrades: J.C. Penney Company, Inc., NVIDIA Corporation, and Chipotle Mexican Grill, Inc.

Analysts upwardly revised their ratings on JCP, NVDA, and CMG

by 5/7/2014 9:23 AM
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Analysts are weighing in today on retail chain J.C. Penney Company, Inc. (NYSE:JCP), chipmaker NVIDIA Corporation (NASDAQ:NVDA), and burrito king Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of today's bullish brokerage notes.

  • JCP has hit technical turbulence following its March 11 year-to-date high of $9.28, dropping 12.8% to its current perch at $8.09. Nevertheless, the stock has still gained almost 43% during the last three months, and received an upgrade to "neutral" from "sell" -- and a price-target hike to $9 from $4 -- at UBS this morning, and now may be poised to erase some of its recent losses in today's session. Leading up to J.C. Penney Company, Inc.'s first-quarter earnings report (slated for after the close on Thursday, May 15), the majority of analysts weighing in on the equity are bearish, with 16 of the 19 dishing out "hold" or worse suggestions. Furthermore, the consensus 12-month price target of $7.47 sits at a 7.7% discount to JCP's current price.

  • NVDA -- which is up nearly 14% in 2014 to trade at $18.25 -- saw its price target lifted to $20 from $19 at FBR this morning. Meanwhile, in the options pits, short-term speculators have been more call-biased than usual toward NVIDIA Corporation, per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.23, which ranks in the bottom 10% of its 12-month range. On an absolute basis, this means call open interest outnumbers put open interest by a roughly 4-to-1 margin among options expiring within the next three months. Of note, however, 9.5% of NVDA's available float is sold short, so some of this long call activity could have been the work of short sellers hedging against more upside on the shares. They could be picking up options-related insurance against a potential post-earnings pop, as well, considering the company will hit the earnings stage after the market closes tomorrow.

  • Although down 19.4% from its March 21 record peak of $622.90 to trade at $501.91, CMG received an upgrade to "buy" from "neutral" from Longbow today. Elsewhere, short-term call players are have been flooding CMG's options pits, ahead of the company's trip to the earnings confessional the morning of Thursday, May 15. To be more specific, Chipotle Mexican Grill, Inc.'s SOIR of 0.91 ranks just 3 percentage points from a 12-month low. This means call open interest (relative to put open interest) is nearing annual-high levels among options expiring during the next three months.

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