Schaeffer's Trading Floor Blog

Analyst Upgrades: Yahoo! Inc., Visa Inc, and Pandora Media Inc

Analysts upwardly revised their ratings on YHOO, V, and P

by 4/14/2014 9:08 AM
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Analysts are weighing in today on Internet issue Yahoo! Inc. (NASDAQ:YHOO), credit card concern Visa Inc (NYSE:V), and streaming music provider Pandora Media Inc (NYSE:P). Here's a quick roundup of today's bullish brokerage notes.

  • After closing last week at $32.87, YHOO is pointed 1.6% higher ahead of the bell, after SunTrust Robinson upgraded the shares to "buy" from "neutral." (However, the brokerage firm also trimmed its price target on the stock to $40 from $42.) Along with its own first-quarter earnings report, the company will unveil revenue and profit figures for Alibaba Group -- of which it owns a large stake -- tomorrow night, which will help gauge expectations ahead of the Chinese e-commerce concern's highly anticipated initial public offering. Friday's activity notwithstanding, YHOO's short-term options crowd is more put-biased than usual right now, as the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.63 sits just 13 percentage points from an annual high. Should Yahoo! Inc. extend its winning streak in the earnings confessional -- the firm has topped bottom-line estimates in each of the past eight quarters -- a mass exodus of option bears could help YHOO add to its 52-week gain of more than 33%.

  • Baird lifted its rating on V to "outperform" from "neutral" this morning. After settling Friday at a year-to-date low of $196.63, the shares are poised to open with a 1.7% gain. The stock is no stranger to optimism, though, as 18 out of 25 ranking analysts consider V worthy of a "buy" or better endorsement, with not a single "sell" in sight. Likewise, the security's SOIR of 0.66 sits higher than just 1% of comparable readings from the past year, suggesting short-term options players have rarely been more call-heavy. Plus, those speculators are paying up to bet on Visa Inc ahead of its turn in the earnings confessional after the close on Thursday, April 24. The stock's Schaeffer's Volatility Index (SVI) of 29% stands in the 70th percentile of its annual range, implying that short-term options are rather pricey right now, from a volatility standpoint.

  • Finally, SunTrust Robinson initiated coverage of P with a "buy" rating and $34 price target, representing expected upside of 34% to the stock's closing price of $25.31 -- a year-to-date low -- on Friday. The shares have underperformed the broader S&P 500 Index (SPX) by nearly 30 percentage points during the past two months, yet Wall Street remains optimistic. Pandora Media Inc sports 13 "buy" or better endorsements, compared to eight lukewarm "holds" and just one "strong sell." Meanwhile, the equity's SOIR of 0.42 ranks in the 16th percentile of its annual range, pointing to a bigger-than-usual call bias of late. Again, those options traders are paying a pretty penny to bet on P's short-term trajectory, as its SVI of 79% sits just 20 percentage points from an annual acme. Of course, the growing demand for P options is undoubtedly related to the company's upcoming earnings report, slated for release after the close on Thursday, April 24. In pre-market action, P is indicated 2.5% higher.

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