Schaeffer's Trading Floor Blog

Analyst Update: Apple Inc. (AAPL), Staples, Inc., and Verizon Communications Inc.

Analysts adjusted their ratings on AAPL, SPLS, and VZ

by 9/2/2014 2:18 PM
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Analysts are weighing in today on iPhone purveyor Apple Inc. (NASDAQ:AAPL), office supply issue Staples, Inc. (NASDAQ:SPLS), and telecommunications titan Verizon Communications Inc. (NYSE:VZ). Here's a quick look at today's brokerage notes on AAPL, SPLS, and VZ.

  • AAPL tagged the $103.74 mark earlier -- it's loftiest perch on record -- after Piper Jaffray raised its price target on the stock to $120 from $105, representing expected upside of 16% from the equity's current perch at $103.39. Separately, the company is making headlines on reports of a partnership with a number of major credit card companies, and questions surrounding the safety of its iCloud. Considering Apple Inc. has rallied roughly 29% this year, the majority of analysts covering the equity maintain a "buy" or "strong buy" rating. However, the consensus 12-month price target of $106.29 is just a stone's throw away from current trading levels, meaning additional price-target hikes may be on the horizon.

  • Credit Suisse upgraded its outlook on SPLS to "outperform" from "neutral," and raised its price target by $4 to $15, on optimism surrounding a potential merger with Office Depot Inc (NYSE:ODP). Against this backdrop, shares of SPLS are up 8.3% today to trade at $12.65, with the stock testing resistance at its 200-day moving average, currently located at $12.70. Longer term, the security has shed 20% this year -- and has not closed north of the aforementioned trendline on a daily basis since Jan. 8 -- so it's no surprise to see short interest accounting for a lofty 13.7% of the equity's available float. Should Staples, Inc. continue to rebound, the stock could be poised for a short-covering rally. At present, it would take more than 12 sessions to cover these shorted shares, at the stock's average daily pace of trading.

  • Goldman Sachs weighed in on a number of telecommunications firms this morning, resuming coverage of VZ, specifically, with a "buy" rating. The stock is failing to capitalize on this upbeat note, and was last seen 0.6% lower at $49.52. Today's technical struggles are nothing new for VZ, which is sitting less than 1% above its year-to-date breakeven mark. Option traders are keeping the faith, though, and over the past 10 sessions, the security has racked up a call/put volume ratio of 3.50 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). What's more, this ratio ranks in the 87th percentile of its annual range, meaning calls have been bought to open over puts with more rapidity just 13% of the time within the past year.

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Stocks On the Move: Digital Ally, Inc., FireEye Inc, and Wynn Resorts, Limited

DGLY, FEYE, and WYNN are moving sharply in Tuesday's trading

by 9/2/2014 12:15 PM
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U.S. stocks are modestly lower this afternoon, as speculators digest the latest manufacturing and construction reports. Among the names making significant moves are on-the-go video issue Digital Ally, Inc. (NASDAQ:DGLY), cyber security concern FireEye Inc (NASDAQ:FEYE), and casino titan Wynn Resorts, Limited (NASDAQ:WYNN). Here's a quick look at how DGLY, FEYE, and WYNN are faring on the charts today.

  • DGLY has skyrocketed 57% to $29.36, and earlier notched a five-year high of $32.50, after the firm said post-Ferguson inquiries for its wearable police cameras have jumped "five-fold." The company subsequently expects full-year sales of about $22.5 million, according to a regulatory filing. Digital Ally, Inc. has more than tripled in 2014, and short sellers are likely feeling the heat. Short interest rocketed 24.6% higher during the most recent reporting period, and now accounts for 11.1% of DGLY's total available float.

  • FEYE has added 4.7% to wink at $32.61, with some speculators on StockTwits citing unsubstantiated buyout buzz. Others, meanwhile, have FEYE in their crosshairs in the wake of the Apple Inc. (NASDAQ:AAPL) celebrity iPhone scandal. Despite today's pop, FireEye Inc shares remain roughly 25% lower on a year-to-date basis, and have underperformed the broader S&P 500 Index (SPX) by 16 percentage points during the past two months. Now, the security is looking to challenge its 10-week and 20-week moving averages, which are converging on the $33 area.

  • WYNN is down 5% at $183.15, amid reports that Macau gambling revenue fell for a third straight month in August. While Wynn Resorts, Limited shares have underperformed the SPX by more than 12 percentage points during the past month, Wall Street remains optimistic. Two-thirds of covering analysts maintain "strong buy" opinions, and the equity's Schaeffer's put/call open interest ratio (SOIR) sits at an annual low of 0.58. In other words, near-term options players haven't been more call-biased during the past year.

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Analyst Downgrades: 3D Systems Corporation, The Boeing Company, and Freeport-McMoRan Inc

Analysts downwardly revised their ratings on DDD, BA, and FCX

by 9/2/2014 9:29 AM
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Analysts are weighing in today on 3-D printing concern 3D Systems Corporation (NYSE:DDD), aerospace issue The Boeing Company (NYSE:BA), and mining magnate Freeport-McMoRan Inc (NYSE:FCX). Here's a quick roundup of today's bearish brokerage notes on DDD, BA, and FCX.

  • Needham cut its price target on DDD to $65 from $70, but maintained its "buy" rating on the equity. This new price target still represents expected upside of 21.5% to Friday's closing price of $53.51, and is above the average 12-month price target of $59.90. Elsewhere, seven analysts maintain a "strong buy" rating toward 3D Systems Corporation, compared to eight who deem DDD a "hold" or worse.

  • Buckingham reduced its outlook on BA to "underperform" from "neutral, while RBC slashed its price target on the stock by $11 to $134. Overall, sentiment toward The Boeing Company is optimistic, despite the shares sitting on a 7% year-to-date deficit. No fewer than 14 out of 20 analysts deem the equity a "strong buy," compared to six tepid "holds." Plus, the consensus 12-month price target of $154.32 stands at a 22% premium to the equity's current perch at $126.80, and in territory yet to be charted.

  • Morgan Stanley weighed in on FCX, cutting its outlook to "equal weight" from "overweight." Freeport-McMoRan Inc spent the month of August churning between $36 and $37, and on Friday, closed at the lower end of this range, at $36.37. Not surprisingly, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.90 ranks in the bearishly skewed 99th percentile of its annual range.

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Analyst Upgrades: Tesla Motors Inc (TSLA), Groupon Inc, and Zulily Inc

Analysts upwardly revised their ratings on TSLA, GRPN, and ZU

by 9/2/2014 9:24 AM
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Analysts are weighing in today on electric car concern Tesla Motors Inc (NASDAQ:TSLA), and online shopping issues Groupon Inc (NASDAQ:GRPN) and Zulily Inc (NASDAQ:ZU). Here's a quick roundup of today's bullish brokerage notes on TSLA, GRPN, and ZU.

  • TSLA is poised to notch a new record high right out of the gate, after Stifel raised its outlook on the equity to "buy" from "hold." Year-to-date, shares of TSLA have added more than 79%, yet six out of 13 analysts covering the equity maintain a "hold" or worse suggestion. Plus, the consensus 12-month price target of $251.06 stands at a discount to Friday's closing price of $269.70. Should Tesla Motors Inc continue its rally up the charts, an additional round of upgrades and/or price-target hikes could help fuel the security's fire.

  • RBC raised its outlook for GRPN to "sector perform" from "underperform," and upped its price target to $6 from $5 (although, this still represents a discount to the stock's current perch at $6.80). Overall, sentiment toward Groupon Inc is tilted toward the bearish side, which shouldn't be too surprising, considering the stock has surrendered more than 42% this year. Specifically, two-thirds of analysts have levied a "hold" or "strong sell" rating toward the equity, and short interest accounts for more than 21% of the stock's available float.

  • CRT joined the majority of analysts covering ZU, by raising its outlook on the shares to a "buy." On the charts, Zulily Inc has put in a dismal performance, and is off nearly 21% year-to-date to trade at $32.80. Option traders at the international Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) are keeping the faith, too, and have bought to open 4.16 calls for every put during the past 10 sessions.

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Buzz Stocks: Dollar General Corp., Visa Inc, Norwegian Cruise Line Holdings Ltd, and Novartis AG (ADR)

Today's stocks to watch in the news include DG, V, NCLH, and NVS

by 9/2/2014 9:11 AM
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U.S. stocks are flirting with breakeven this morning, with manufacturing and construction data in focus. In company news, today's stocks to watch include discount retailer Dollar General Corp. (NYSE:DG), credit card issue Visa Inc (NYSE:V), travel concern Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), and drug maker Novartis AG (ADR) (NYSE:NVS).

  • Dollar General Corp. (NYSE:DG) isn't giving up on its pursuit of Family Dollar Stores, Inc. (NYSE:FDO), upping its bid to $80 per share. Last month, FDO's board officially rebuffed DG's $78.50-per-share bid in favor of a previous bid from Dollar Tree, Inc. (NASDAQ:DLTR). (MarketWatch)

  • Visa Inc. (NYSE:V) -- along with sector peers MasterCard Inc (NYSE:MA) and American Express Company (NYSE:AXP) -- are reportedly partnering with Apple Inc. (NASDAQ:AAPL) to turn the next iPhone into a mobile wallet. The deal -- along with the next device -- will allegedly be unveiled on Sept. 9. In other news, AAPL has reportedly corrected a bug that may have allowed hackers to gain access to private celebrity photos. (Bloomberg; USA Today)

  • Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) will acquire Prestige Cruises International for $3.025 billion in cash and stock. The merger "will provide solid accretion to earnings per share and drive long-term shareholder value," opined Norwegian Cruise Line CEO Kevin Sheehan. (CNBC)

  • Novartis AG (ADR) (NYSE:NVS) is pointed higher ahead of the bell, after the Swiss drug maker reported solid data for its heart failure drug -- the launch of which could be NVS' "most exciting" ever, according to David Epstein, Novartis' head of pharmaceuticals. As such, sales forecasts for LCZ696 have been ramping up at near fever pitch. (Reuters)

  • Finally, CONN's, Inc. (NASDAQ:CONN) is poised to plummet more than 25% out of the gate, after offering up lackluster earnings and cutting its full-year guidance. (San Antonio Business Journal)

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